Moroccan Finance Minister Fouzi Lekjaa announced on October 23 that salaries below 10,000 dirhams will be exempt from income tax as part of the 2027 Finance Bill. This move aims to reduce the tax burden on low-income earners. The exemption will take effect on January 1, 2027. Lekjaa made the announcement during a joint parliamentary session to present the bill. The proposed tax reform also includes adjustments to tax brackets and rates.
The tax reform plans to raise the threshold for the first tax-exempt income bracket from 40,000 to 60,000 dirhams per year. Additionally, the number of taxable brackets will be reduced from five to three, with progressive tax rates of 10%, 20%, and 30%. The top marginal tax rate will be lowered from 37% to 30%. These changes are designed to provide relief to taxpayers and simplify the tax system.
According to Lekjaa, the exemption will benefit 87% of salaried individuals, while 13% will continue to be subject to income tax. The monthly gain for most affected employees will be around 500 dirhams starting in January 2027. The total budget cost for this measure is estimated at 5.5 billion dirhams. This move is part of a broader effort to increase the purchasing power of Moroccans.
The government plans to continue implementing the tax reform over the coming years, leading to further increases in monthly gains for taxpayers. By 2031, employees earning 11,800 dirhams per month are expected to see a monthly gain of 1,186 dirhams, while those earning 18,700 dirhams per month will gain 3,979 dirhams. This phased approach aims to provide sustained support to low- and middle-income earners.
The 2027 Finance Bill is part of the government's efforts to address economic challenges and improve living standards. Lekjaa emphasized that the tax reform is a key component of this strategy. The bill will be debated and voted on by parliament in the coming weeks. Its passage will pave the way for the implementation of the proposed tax changes.
The announcement has been welcomed by many as a step towards reducing the tax burden on low-income earners. However, some have expressed concerns about the impact on government revenues. The government has assured that the reforms will be implemented in a way that ensures fiscal sustainability.
The 2027 Finance Bill also includes other measures aimed at promoting economic growth and social development. These include initiatives to support small businesses and improve access to education and healthcare. The bill is expected to be a key factor in shaping Morocco's economic trajectory in the coming years.
Key points
- Morocco's 2027 Finance Bill includes a plan to exempt salaries under 10,000 dirhams from income tax.
- The tax reform aims to reduce the tax burden on low-income earners and simplify the tax system.
- The exemption is expected to benefit 87% of salaried individuals and will take effect on January 1, 2027.
