Morocco Cracks Down on Ghost Companies in Massive Tax Fraud Sweep

It’s a tough time for inactive companies. The control and recovery services have sent them surprise notices to regularize their tax and legal situation, through the submission of activity cessation declarations, in accordance with the provisions of Articles 228 bis and 229 of the General Tax Code. Most of these notices were sent to establishments domiciled along the Rabat-Casablanca axis, based on a preliminary list carefully drawn up by these services, targeting inactive companies presenting high risks related to the production and promotion of forged invoices, according to sources at Hespress.

These companies have only 30 days from the date of receipt of the notices to submit a declaration of cessation of activity, in order to be registered in the register of inactive establishments and to stop the execution of the ex officio taxation procedure against them. "The tax inspectors have decided to move from the carrot to the stick in their treatment of certain companies, which have been proven to have carried out operations and resumed their taxable activity after their registration in the register of inactive establishments," the same sources said, adding that these companies will be struck off this register and taxed ex officio without prior notification, with the application of daily penalties in case of refusal to provide accounting documents or to submit to tax audits.

There is coordination between the regional tax control elements and the legal affairs monitoring service, under the Litigation Department of the Directorate General of Taxes, to transfer the files of "inactive" companies engaged in the production and promotion of forged invoices, for transmission to the public prosecutor’s offices of the courts of the kingdom. These files were accompanied by requests for legal proceedings targeting managers, accountants, intermediaries and "brokers" involved in transactions that have cost the Treasury several billion dirhams in tax revenues through the sale of false invoices to companies for commissions exceeding 3%.

The number of inactive companies is estimated at around 300,000, the same sources add, noting that these companies have contributed to the dissemination of forged invoices worth around 60 billion dirhams.