Adherence to auto-entrepreneur status drops by 34% in Morocco after years of popularity

Enrollment in the auto-entrepreneur scheme has declined by around 34% over the past year, following legislative changes to this status that specify a setting for the number of transactions that are subject to a low tax.

The auto-entrepreneur status permits each individual to independently engage in an industrial, commercial, or vocational activity or to provide services, on the condition that their annual turnover for those activities does not exceed 500 000 dirhams and their annual turnover for service-providing activities does not exceed 200 000 dirhams.  

The increase in participants last year was primarily attributed to government-launched programs, such as Awrach and Forsa, where several associations mandate those operating in these two programs must enroll in the auto-entrepreneur status, according to Abdullah Ferki, head of the Moroccan Confederation of Very Small, Small and Medium Enterprises.

Several businesses are now turning to this scheme to cut costs rather than hiring due to the new regulation this year that limited the number of auto-entrepreneur transactions with one customer to 80 thousand dirhams and imposed a 30% tax in the event that this cap was exceeded, according to the Ministry of Economy and Finance.

“Establishing a cap on the overall number of transactions per year and transactions with a single consumer encourages a significant number of individuals involved to give up,” Ferki told Hespress AR.

There were roughly 56,699 engagements registered in 2018 compared to 86,23 engagements in 2021, according to the General Directorate of Taxes’ annual report. 

By the end of 2022, there were approximately 406,000 auto-employed people, a rise of almost 12% annually from the approximately 363,000 people who were registered in this program in 2021.

As of 2020, the status had the fastest growth rate, with 287,000 users, a rise of almost 119% annually.

Under this status, employees are liable for a simplified tax that is set at 1% of the revenue generated by industrial, commercial, and craft operations and 2% of the revenue generated by service providers.