The General Confederation of Moroccan Enterprises (CGEM) has proposed a gradual reduction of the income tax rate over the next three years, aiming for a marginal rate of 35% by 2027. This would be accomplished through a one-point reduction each year.
In addition to the income tax adjustments, the CGEM has put forth several recommendations to the government designed to improve the country’s overall tax environment. These proposals, which target corporate and personal taxes as well as customs duties, seek to create a more favorable business climate and stimulate economic growth.
Among the key proposals, the CGEM suggested increasing the tax-exempt threshold for severance pay or dismissal compensation to 2 million dirhams for individuals aged 50 and older. It also recommended raising the tax-exempt threshold for food baskets to MAD 50.
To reform the corporate tax calculation, the CGEM called for maintaining a five-year exemption for all new companies. The confederation proposed harmonizing the tax base for property owners and tenants by focusing on Earnings Before Interest and Taxes (EBIT) as the most appropriate measure for determining taxable income in this context.
Additionally, the CGEM suggested introducing a green and carbon tax based on the “polluter pays” principle, which would initially be tested in five sectors. This new tax is intended to replace existing taxes, such as the domestic consumption tax (TIC), rather than adding to the overall tax burden on companies.
The CGEM further proposed a long-term carbon pricing mechanism in the form of an emissions trading scheme (ETS).
Regarding corporate income tax (IS), the CGEM recommended streamlining the installment payment method and increasing the minimum deductible threshold for passenger vehicle purchases.
The confederation also called for a review of the value-added tax (VAT) system to address concerns over its neutrality and limitations on VAT credits.
Finally, the CGEM urged for a reduction in customs duties on imported inputs, a reassessment of the domestic consumption tax (TIC) calculation method, and a more equitable application of customs duties on intellectual property rights.
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