Towards greater tax fairness?
In Morocco, less than 1% of companies alone finance 80% of the corporate tax. We also observe that 73% of the income tax is borne by employees only.
This situation isn’t new, and it raises questions of tax fairness and taxpayer equality.
10 principles to reform Moroccan taxation
Following the work and discussions at the conference, the Minister of Economy and Finance, Mohamed Benchaâboun, summarised 10 principles that should be included in future reforms.
- Guarantee complete VAT neutrality;
- Increase the marginal rate of protected economic activities;
- Standardise the preferential tax regimes applied to exports, export processing zones, and Casablanca Finance City;
- Gradually revise the minimum corporate tax with a view to phasing it out by 2024;
- Optimise the income tax rates and brackets to support the purchasing power of low- and middle-income groups;
- Simplify local taxation and align its tax bases and its procedures with state taxation, in particular with the business tax, and incorporate state taxation, local taxation, and incidental taxation into the general tax code;
- Reorganise the income tax scale as the base of this tax expands;
- Reinforce taxpayers’ rights with a view to balancing rights and obligations;
- Strengthen the efforts to modernise the tax authorities by finalising the transition to paperless operation and promoting the values of ethics and transparency;
- Reduce the marginal corporate tax rate for certain sectors to boost job creation and foster innovation.
They are intended to be included in a “draft framework law on taxation” and developed under the new finance laws.
It is hoped that the new tax measures stemming from these principles will distribute the tax effort more evenly among taxpayers and correct these tax inequalities. The recommendations are expected to be implemented between 2020 and 2024.
Press Release Expert Opinion - Jeune Afrique July 2019
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