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    Morocco’s Fiscal Reform Aims for Equitable Tax and a Simplified Process

    Among many new amendments, the new legal framework aims to make fiscal resources a major contributor in the financing of social projects, and ensure the sustainability of the public social safety net for the next 5 years.

    06 Jul 2021

    Rabat - Adopted on Monday, June 28, by the Council of Ministers, the framework bill on tax reform will now begin its legislative shuttle between the two chambers of Morocco’s parliament.

    The draft bill’s presentation was postponed, as it coincided with the launch of the Special Commission on the Development Model (CSMD).

    The CSMD’s report advocated the promotion of both economic growth, as well as social inclusion and cohesion by establishing an efficient, fair, equitable, and balanced tax system.

    To create a comprehensive and complementary framework for Morocco’s future, the draft is only now in motion as the CSMD’s project recently came to light.

    This legal framework aims to reform the taxation of local communities, simplifying and harmonizing it with central (national) fiscal norms.

    Among its provisions will be a reference framework that lays out principles such as providing legal certainty for taxpayers, simplifying and enhancing the tax system, and setting tax norms proportionate to taxpayers' potential, through implementing a set of priority measures that will unfold in the next five years.

    Article 1 of the law reiterates the CSMD’s report, also aiming for a 'fair, equitable, consistent, efficient and transparent taxation.'

    The simplified tax system will be transparent and encourage high-quality investments on the local level. These goals will be achieved through public investment incentives and strengthened control measures.

    The first requirement imposed by the law concerns 'the protection of taxpayers from any abuse in the interpretation of laws by fiscal administrations, and to strengthen the trust between the taxpayers and concerned government bodies.”

    In the framework law, this is one of the main measures aimed at reducing tax litigation burdens while also reducing the complexity of the legal process and streamlining the law's contents.

    The law provides for a drastic change in the area of access to tax information. Making fiscal norms more understandable can only be successful if the access itself is facilitated. The law emphasized the importance of mass publication and broadcast of tax requirements and procedures.

    The bill also specifies that tax incentives, subject to the provisions of Article 2, are granted only if the beneficiaries cannot obtain a comparative advantage in the form of a direct public subsidy. In other words, budget support will replace subsidies as a general rule.

    In addition to the simplification of the fiscal process on the local level, the bill also focuses on another crucial element: the allocation of collected fiscal resources.

    The organic law references Morocco’s ambitions in building a strong and generalized social coverage system, and highlights its plans to strengthen social programs by planning to mobilize most tax resources towards financing public services accordingly.

    Another important contribution of the newly published bill, is the importance it gives to regional entities in terms of financial resource autonomy. Morocco’s fiscal system is among the most centralized in the world, but as highly centralized financial models lose popularity, this bill allows for future flexibility and a forseable relative autonomy, in the management of local fiscal resources.

    There was also an emphasis on the need to establish a more equitable tax system with the implementation of the principle of fiscal equality in the proposed framework law.

    Appropriate tax measures will also be enacted for the development of the cultural sector; the promotion of the social economy and the protection of the environment through the introduction of a carbon tax.


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