After the start of Morocco’s legislative year, the Moroccan Labour Union (UMT) has submitted several proposals aimed at improving the income of employees, including the approval of a general increase in the wages of workers and employees, in light of the skyrocketing prices of consumable products, services, and costs of living. These proposals come within the context of protecting the purchasing power of workers.
The UMT has stated in a document submitted to the Ministry of Economy and Finance, which is in charge of the budget, several proposals to be included in the financial bill of 2023. One of these proposals is reducing income tax to achieve fiscal justice, following the recommendations of the third national fiscal debate held in 2019 in Skhirat.
The Moroccan Labour Union considered that the reform of the income tax system was one of the key entry points for establishing an equitable tax system. This latter aims to enhance the purchasing power of wage earners by adopting a new system as an indirect mechanism to embellish and improve the working class’s situation.
Additionally, the UMT stressed the urge to apply income tax equitably to all incomes in a manner that is proportionate with the binding capacity to contribute since the working class has contributed to 74% of the total resources of the tax.
Within the same vein, UMT has also proposed to the Government changes to be made on the level of the network currently adopted to expand the tax base and take into account the high prices of several raw materials.
The UMT proposes to exempt annual earners of 0 to 36.000 dirhams from tax, to set income tax from 36.001 dirhams to 50.000 dirhams at 7%, and at 17% for yearly income from 50.001 dirhams to 60.000 dirhams.
As for annual wages from 60.001 dirhams to 80.000 dirhams, the Moroccan Labour Union proposed that the tax be set at 28% and 32% for wages from 80.001 dirhams to 180.000 dirhams, while the tax on wages above 180.000 dirhams should be within 36%.
“The proposed rate is negotiable, as we did with the Government of Driss Jettou as well as the Government of Abbas El Fassi to remedy the lost purchasing power,” says Miloudi Moukharik, the Secretary General of UMT, to Barlaman Today, adding that “these are practical and actionable proposals that the government can only respond to.”
Source: UMT
For this reason, UMT has demanded that the income tax deduction from 30 dirhams to 100 dirhams should be increased for wives and each child. At the same time, the deduction of occupational expenses should be increased from 20% to 30% for wages, in addition to the increase in the net reduction of pensions from 60% to 70%.
“Today is the last meeting of the Government with the representative of the Ministry of Finance; if he responds and the proposals are accepted, we will then say that we have reached the goal of our cause, and if it is rejected, we will go back to the Head of Government,” says Mr. Moukharik to Barlaman Today.