The general confederation of Moroccan enterprises (CGEM) urged the new government to adopt changes to Morocco’s tax system in the face of “real obstacles,” that are hitting investors and taxpayers.
The CGEM calls for reform come as the Aziz Akhannouch-led liberal government prepares the 2021 finance law.
“it is necessary to enhance confidence between taxpayers and the administration to democratize tax participation in an atmosphere of transparency,” said the CGEM in a statement, calling for reducing the minimum tax rate with a view of abolishing it within 5 years.
Tax revenues collected in Morocco in 2020 reached 144.8 billion dirhams, down 5.4% compared with 2019 rates.
The CGEM said corporate tax rates and local taxes should be reformed too. It called on the government to generalize 10% VAT on solar equipment and the establishment of a targeted dividends received deduction (DRD).
About 140 companies in Morocco cover nearly 50% of income tax, company tax and VAT combined.80% of corporate tax revenue is paid by only 1% of companies present in the country.
In March 2020, the PJD-led government adopted a tax reform law, including abolishing the five-year exemption for new exporting companies, and generalizing uniform rates of 15% on companies established in industrial acceleration zones.
Such measures are aimed at making the rich pay a fair share of taxes and recover from the fiscal deficit the county incurred in 2020, at 7.6% with expectations to cut it to 6.3% in 2021.
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