In preparation for next year’s national budget, the Moroccan government has adopted a tax reform aimed at large companies with the aim of “achieving higher returns to cope with adverse conditions” and “increasing the contribution of these companies to development and social welfare,” reports Al-Arab.
Through what Rabat called “solidarity mechanisms,” large companies will gradually increase their contribution rate to boost the national economy. According to the Arab newspaper, companies earning more than 100 million dirhams ($9.2 million) are expected to increase their contribution rate by 35%. In contrast, those earning less than that amount will be taxed at 20% percent.
Moroccan Prime Minister Aziz Akhannouch said he thought it was “fair” that companies that earn more should pay more taxes, noting that the country is in an “exceptional” situation. “We all must contribute to achieving social justice,” he said. Akhannouch stressed that businesses have “a key role in consolidating social cohesion and protecting state projects.
For her part, the Minister of Economy and Finance, Nadia Fattah Al-Alaoui, stressed that the current context requires that “everyone contributes to the expenses. She spoke of «social justice” and stressed that, despite this measure, the government is committed to stimulating investment in the public and private sectors.
“Investment is a key mechanism to lay the foundation for sustainable growth that provides employment opportunities and financial resources for various social and development programs, by the directives of King Mohammed VI,” explained Fattah Al-Alaoui.
The Finance and Economic Development Commission has listed some industries affected by this measure, such as oil and fuel companies and the financial and banking sector.
According to data collected by Al-Arab, the profits of seven major companies in the fuel distribution sector amounted to 1.68 billion DH ($93 million) per year. These revenues have come from the sale of gasoline over the past four years.
On the other hand, economic analyst Muhammad Sharqi points out that this measure is a way for the state to “support and encourage investment.” He also identified the need for large companies that have made significant profits in times of crisis to “show solidarity with social needs in the face of international and national challenges,” such as the consequences of the droughts that have affected the Kingdom.
“In addition to covering social welfare expenditures, this will accelerate investment, provide more employment opportunities for youth and reduce the 11% unemployment rate”, Sharqi says. It will also reduce dependence on external financing and borrowing.