Morocco's government has introduced its 2027 budget plan, which builds on the country's fiscal progress over the past five years. The plan, submitted to parliament on October 20, 2026, outlines several key measures aimed at further strengthening the nation's finances. These measures are designed to enhance the business environment, improve living standards, and promote economic growth. The budget plan's fiscal chapter is a continuation of the previous government's reforms, which have led to a substantial increase in tax revenues.
The 2027 budget plan focuses on revising the income tax (IR) system, with a significant increase in the exemption threshold from 40,000 to 60,000 dirhams. This change aims to alleviate the tax burden on low-income earners and reduce the informal employment sector. The plan also proposes reducing the number of taxable income brackets from five to three, with progressive tax rates of 10%, 20%, and 30%. The top marginal tax rate will decrease from 37% to 30%. These changes are expected to benefit 87% of Moroccan employees, with an estimated monthly gain of 500 dirhams.
The government's strategy for implementing the IR reform is progressive, with a phased rollout over five years, from 2027 to 2031. Starting January 1, 2027, salaries below 10,000 dirhams will be fully exempt from IR. The reform's impact on the state's budget is estimated at 5.5 billion dirhams in 2027. The government aims to evaluate the reform's effects on household incomes and public revenues, while also expanding the tax base and combating tax evasion.
The 2027 budget plan also introduces measures to encourage formalization, including the rationalization of exemptions for indemnities and a higher flat-rate deduction for employment-related expenses. Additionally, the plan proposes reinstituting a transitional measure to integrate individuals from the informal sector into the structured economy. This measure allows them to register with the tax administration without facing penalties for previous years.
The budget plan also addresses the corporate tax (IS) and value-added tax (TVA). The government will apply a 40% tax rate to companies involved in importing or distributing hydrocarbons, with a net profit of 100 million dirhams or more. This change takes effect on January 1, 2027. Furthermore, the plan allows for the distribution of investment subsidies over ten years, rather than reporting them as income in the year of receipt.
The 2027 budget plan's success depends on various factors, including its impact on public finances and the economy. The government aims to build on the progress made in the previous five-year period, which saw a significant increase in tax revenues and a reduction in the budget deficit. The plan's measures are designed to promote economic growth, improve living standards, and enhance the business environment.
The implementation of these fiscal measures will be closely monitored, with an evaluation of their effects on household incomes, public revenues, and economic growth. The government's goal is to create a more favorable business environment, reduce the informal sector, and promote sustainable economic growth.
Key points
- The 2027 budget plan includes a significant increase in the income tax exemption threshold to 60,000 dirhams.
- The plan proposes reducing the number of taxable income brackets from five to three.
- The budget plan aims to integrate individuals from the informal sector into the structured economy.
