December 30 2021

Morocco Undertakes Comprehensive Tax Reform

Source: IBFD Tax Research Platform News

The comprehensive Moroccan Framework Law No. 69-19 has been gazetted. It provides detailed tax reform objectives and mechanisms for its implementation in accordance with the Moroccan Constitution. The main priorities and objectives of the tax reform are summarized as follows:

  • encouraging productive investment, effective redistribution and reduction of inequalities, territorial development, strengthening the effectiveness and efficiency of the tax administration and strengthening confidence with taxpayers;
  • strengthening contribution of the state and territorial collectivities in the financing of economic and social development policies;
  • reducing the tax burden on taxpayers where the tax base is broadened;
  • progressive implementation of the principle of taxation of global income for individuals;
  • integrating the informal sector into the structured economy; and
  • strengthening measures to combat tax fraud and tax evasion.

The Framework Law provides priority measures which aim to be implemented within 5 years from the date of the publication of the Law (July 2021), as follows:

  • consolidating tax neutrality in VAT by broadening the scope of application, reducing the number of rates and generalizing the VAT refund. The VAT exemption of basic products will be maintained;
  • converging gradually towards a unified corporate tax rate;
  • improving the corporate tax contribution of public institutions and enterprises and companies engaged in regulated, monopoly or oligopoly activities;
  • lowering the minimum tax contribution rates gradually;
  • encouraging the development of innovative companies (e.g. start-ups, support structures (incubators and accelerators) and auto-entrepreneurs' aggregators);
  • reviewing the progressive scale of individual income tax rates and broadening the tax base;
  • adapting and improving the single professional contribution regime (contribution professionnelle unique) to accelerate the integration of the informal sector;
  • simplifying the taxation of territorial collectivities; and
  • aligning the Moroccan tax system with the rules of good governance provided in international tax matters.

The official translation into French of the Framework Law No. 69-19 on tax reform (Loi-cadre n° 69-19 portant réforme fiscale) has been published in the Official Gazette No. 7010.