Morocco's 2027 finance bill has been approved by the first chamber with 179 votes in favor and 126 against. The bill underwent 291 amendments, with 59 approved by the government. These amendments aim to support wages and tighten regulations on e-cigarettes and cigars. The bill maintains the current income tax exemption for those earning 5,000 dirhams or less per month.
The finance bill keeps the flat-rate deduction for professional expenses at 45% for all employees, with an annual cap of 35,000 dirhams. Employers who sign employment contracts based on net salary must increase the employee's net salary to match the approved tax reduction. Failure to comply will result in the loss of the right to deduct related labor costs.
The bill also introduces changes for self-employed contractors, raising the annual cap on transactions with a single client to 100,000 dirhams without source deduction. Additionally, the tax rate for those subject to the unified professional contribution system has been reduced from 30% to 20%. The annual real estate income cap exempt from source deduction has been increased from 40,000 dirhams to 60,000 dirhams.
The finance bill abolishes fines for employees, compensation, and pensions that were previously subject to incorrect income. On the corporate tax front, parliamentarians were unable to convince the government to raise taxes on telecommunications and cement companies. However, the government agreed to raise taxes on fuel import companies with net profits exceeding 100 million dirhams to 40%.
The bill also reduces the tax advance applied to goods ready for resale from 5% to 3%, but only for three years. Internal consumption taxes on cigars have been increased from 750 dirhams to 1,125 dirhams per thousand units. Taxes on e-cigarette liquids have been raised to 10 dirhams for nicotine-free liquids and 20% for those containing nicotine.
The bill exempts household electricity consumption from value-added tax, up to 150 kilowatt-hours per month. The validity period for tax exemption certificates has been reduced from six months to 30 days to enhance monitoring. The bill also introduces flexibility in refund procedures for value-added tax credits to support companies.
The approved amendments aim to balance the budget while promoting economic growth. The government has demonstrated its commitment to supporting low-income earners and promoting a fair tax system. The finance bill is expected to have a positive impact on the country's economy and citizens.
Key points
- The Moroccan 2027 finance bill maintains wage support and increases taxes on e-cigarettes and cigars.
- The bill aims to promote economic growth while ensuring a fair tax system.
- The approved amendments include increased taxes on fuel import companies and reduced tax advances for goods ready for resale.
