Baitas: 86% of Moroccan retirees to benefit from full income tax exemption in 2026

Mustapha Baitas, the Minister Delegate to the Head of Government for Relations with Parliament and Government Spokesperson, announced on Thursday that the complete exemption of pensions from income tax is part of the broader income tax reform. This follows a previous reform for employees, which is expected to cost 5 billion MAD in 2024.

In a press briefing held on Thursday following the government’s meeting, Baitas explained that the 2025 Finance Law includes a provision for the full exemption of pensions and life annuities paid under the basic pension systems, effective January 1, 2026. However, in 2025, a 50% reduction will be applied to the income tax on pensions and retirement income earned during that year.

Baitas also pointed out that this measure alone will cost over 1.2 billion MAD and benefit 164,744 retirees. Around 86% of retirees registered with the Moroccan Pension Fund will be exempt from this tax.

He noted that employees are the largest contributors to income tax. With the government’s recent reforms, it has become possible for other sectors—not necessarily employees, but workers—to benefit.

Baitas mentioned that the average benefit for employees and workers is approximately 400 MAD. There will be some groups that will benefit less from this reform, and some groups that will benefit more.

The government spokesperson clarified that “efforts have been intensified to control income tax from sectors that had not been paying for years.

He explained that “the government has been implementing the recommendations of the national tax dialogue and applying the legal provisions of the framework law on tax reform.”

The ultimate goal, according to the Minister Delegate in charge of Relations with Parliament, is “to broaden the tax base and reduce the burden by bringing new taxpayers into the system, given the shortcomings of the previous tax procedures.”

As to the issues raised about the social protection project, Baitas mentioned that “this comprehensive project has been strongly supported by the government under the directives of the King.”

He added, “a country that has achieved significant gains in terms of infrastructure and economic reforms  is naturally poised to embrace this new endeavor,” explaining that “today, 3,769,000 non-salaried workers are benefiting from this project.”

Baitas acknowledged that “’more efforts need to be made to increase this number,” noting that “11,048,656 individuals who are unable to afford the subscription fees are currently benefiting from health coverage.”

The minister defended, “there is no system in the world that succeeds at 100 % in its first year, but this government, through continuous and diligent work on reforming laws and decrees and implementing measures, aims to move forward swiftly to reform this system that now concerns 11 million Moroccans, which is about 30% of Moroccans; and we are talking about a system that is 100% funded by the state.”