Government rejects opposition's push for wealth tax in 2024 finance bill

The opposition faced a setback in Parliament in its efforts to persuade the government to introduce a wealth tax as part of the 2024 finance bill. 

The proposal, aimed at achieving comprehensive and equitable tax reforms, was met with staunch resistance from the government, which remains steadfast in its conviction that the current tax reform does not warrant such measure.

During the parliamentary debates, opposition member Fatima Tamni, the parliamentary deputy from the Democratic Left Federation party, emphasized the significance of wealth taxation as a means to bolster the state treasury for funding public expenditures. 

Tamni proposed a progressive tax scale, suggesting rates ranging from 0.2% for wealth between MAD 10 million and MAD 20 million to 0.5% for wealth exceeding MAD 500 million.

Opposition parties said that imposing a wealth tax is a popular demand among wider segments of society. The Progressive and Socialist Team urged directing the tax toward a Youth Employment Development Fund.

The same party suggested the introduction of wealth tax, set to begin on January 1st of the coming year. 

The Authenticity and Modernity party proposed a modification applicable to total earnings surpassing MAD fifty million  (50,000,000), irrespective of their origin. This includes income generated from real estate, funds, transferable values, commercial assets, and more.

Similarly, the Justice and Development Party (PJD) recommended a fresh contribution from major corporations, proposing a 6% increase. This adjustment aims to enhance tax revenues and fund the social support system for vulnerable and low-income families.

The PJD also advocated for a wealth tax, proposing a 30% rate on luxury items like tourist cars, perfumes, decorative items, and cosmetic products.

PJD also supported an added tax burden on large corporations. Their proposal includes the inclusion of fuel and communications companies, suggesting a 40% corporate tax rate.

The same part recommended an extra 5% exceptional tax on net profits exceeding MAD 200 million to rejuvenate the state treasury and fund public initiatives.

Despite the opposition’s arguments framing wealth taxation as a pathway to national solidarity and public funding, Minister Delegate for Budget, Faouzi Lekjaa, said that ongoing tax reforms, set to conclude in 2025, will continue. 

Lekjaa added that the government will address concerns related to individuals earning over MAD100 million later on, and will formulate proposals in this regard.

“The debate on wealth tax has been present since the late eighties, with committees extensively studying its implications,” said Lekjaa. 

Lekjaa further explained that the issue is not tied to specific circumstances and can be addressed anytime. 

Lekjaa underscored the global challenges associated with wealth taxation, including legal considerations such as the status of jewelry and savings in such a system. 

The government, instead, advocates for an optimal and effective approach, focusing on increasing corporate taxes and introducing solidarity taxes on high profits.