The General Confederation of Moroccan Enterprises (CGEM) is advocating for a gradual reduction in the income tax rate over the next three years, targeting a marginal rate of 35% by 2027 through annual one-point cuts.
In addition to the proposed income tax changes, the CGEM has shared several recommendations with the government aimed at enhancing the overall tax landscape in Morocco. These proposals are designed to improve both corporate and personal taxation, as well as customs duties, ultimately fostering a more favorable business environment and encouraging economic growth.
Key recommendations include:
– Increasing the tax-exempt threshold for severance pay or dismissal compensation to 2 million dirhams for individuals aged 50 and older.
– Raising the tax-exempt threshold for food baskets to 50 dirhams.
– Maintaining a five-year tax exemption for all new companies to stimulate startup growth.
– Harmonizing the tax base for property owners and tenants by using Earnings Before Interest and Taxes (EBIT) to determine taxable income.
– Introducing a green and carbon tax aligned with the “polluter pays” principle, initially trialed in five sectors, with the goal of replacing existing taxes like the domestic consumption tax (TIC).
– Implementing a long-term carbon pricing strategy through an emissions trading scheme (ETS).
– Streamlining the method for corporate income tax installments and increasing the minimum deductible for passenger vehicles.
– Reviewing the value-added tax (VAT) system to improve its neutrality and address VAT credit limitations.
– Reducing customs duties on imported inputs and reassessing the domestic consumption tax calculation.
– Ensuring a fair application of customs duties on intellectual property rights.
These thoughtful recommendations aim to create a more competitive and robust economic framework that can boost growth and development in Morocco.
