Morocco Budget Talks: Government and Unions Clash Over $200 Million Salary Increase Plan

The cost of the government’s offer was presented by the Delegate Minister in charge of the Budget, Fouzi Lekjaâ, and does not exceed 2 billion DH. Included in the 2023 Finance Bill, it will help reduce the tax burden on holders of salaried and assimilated income and retirees. Thus, according to the PLF adopted last Wednesday by the government, it is proposed to raise the flat-rate deduction rate for professional expenses from 20 to 35% for persons whose annual taxable gross income is less than or equal to 78,000 DH. For those whose annual taxable gross income exceeds this amount, the flat-rate is set at 25%, with an increase in the deduction ceiling from 30,000 to 35,000 DH.

In a statement, the executive office of the Democratic Confederation of Labor (CDT) rejected the government’s offer, describing it as "meager and not meeting the expectations of employees and retirees to cope with the surge in prices of basic products and services." For its part, the Moroccan Labor Union (UMT) demands that the government’s offer be in line with "the rise in prices and the high cost of living and the adoption of a new IR scale as an indirect mechanism to improve the purchasing power of citizens".

Regarding the government’s offer, economist Mohammed Rahj indicated to the daily Le Matin that "all that the government proposes is to slightly revise the tax system in terms of IR, but ultimately, these are only small measures consisting of increasing the ceiling of professional charges exempt from tax from 20 to 25% and moving the first tranche of annual income exempt from tax from 30,000 to 35,000 DH, in addition to a tax deduction in favor of retirees who will go from 60 to 65%".