Morocco’s 2021 Budget Forecasts Sharp Decline in Tax Revenue Amid COVID-19 Impact

According to the forecasts of the 2021 Finance Bill (PLF), the drop will be much more pronounced in terms of tax revenues from CIT, i.e. 27.76%. The same phenomenon will be observed in the drop in revenues from PIT, with -13.82%, and the drop in revenues from registration and stamp duties, i.e. -11.49%, reports Challenge.

Regarding the revenues from VAT managed by Customs, they will experience a drop of 8.95%. However, still according to the projections of the 2021 PLF, a quasi-stagnation, i.e. a symbolic increase of 0.86% of the VAT revenues managed by the Directorate General of Taxes, is envisaged. Meanwhile, a 3.41% drop is announced on the Domestic Consumption Tax, managed by Customs.

In plain terms, the drop in tax revenues will be much stronger at the level of direct taxes. A situation attributable to the current tax system that leads to a worsening of the unequal distribution of tax.

The overall drop in tax revenues, forecast by the 2021 PLF, should exceed 31.50 billion dirhams. According to the forecasts issued for next year, the social solidarity contribution on profits and income, already applied from 2013 to 2015, and renewed by the 2021 PLF, should bring in, according to the Minister of Finance, 5 billion dirhams. A windfall that would not be enough, however, to make up for the overall drop in tax revenues forecast by the 2021 PLF.