Moroccan Banks Face 40% Tax Rate by 2026 as Government Expands Financial Sector Levies

These various measures are the result of the corporate tax (I.S) reform contained in the 2023 finance bill, specifying that they concern the entire financial sector of the Kingdom: banks, insurance companies, leasing companies and consumer credit organizations.

According to the project, from 2026, all these structures will be subject to a rate of 40% on their profits. Until then, the current rate will increase each year. Informed, the banking players have estimated that they are now suffocated. Their unions intend to dissuade the executive from renouncing the increase in the tax burden on their companies.

The social solidarity contribution has been renewed for the next three years. Another blow for banks and insurance companies, point out the sector defense associations, specifying that their companies are in the upper range of the target of this special tax (from 40 million DH, or 4 million euros) which, originally, was supposed to be temporary.

To make this measure acceptable, the Ministry of Finance would have promised the banks to quickly align the tax rules for provisioning non-performing loans with the central bank’s regulations, in addition to a reduction in the taxation of dividends (withholding tax will drop from 15 to 10% over four years).