Morocco to Cut Taxes for Low-Income Earners in 2025 Reform

The initial objective was to create two separate tax brackets, one for salaries and the other for other income. Despite the expertise of national and international specialists, this solution proved complex to implement. "The field remains open, if we find a way to separate, we will adopt it," however assured Mr. Lekjaa, adopting a participatory approach.

Concretely, 70% of the beneficiaries of this reform have an annual income of less than 180,000 dirhams (i.e. 15,000 dirhams gross and 12,000 dirhams net per month). Faced with questions from deputies about the impact of this measure for high incomes, the minister was open to proposals: "I don’t want you to benefit from it, and I agree with you; but if there are proposals on this subject, I accept them and await them".

To ease the tax burden on the poorest, the government has agreed to a reduction of 5.5 billion dirhams. "Before the adoption of the finance bill, there may be additional proposals that we will deal with," Mr. Lekjaa specified.

What are the key measures of this reform?

• Exempt net income: the exemption threshold is raised from 30,000 to 40,000 dirhams, which means that salaries below 6,000 dirhams per month will no longer be taxable.
• Tax reduction for the highest incomes: the maximum tax rate is reduced from 38% to 37% for incomes exceeding 180,000 dirhams.
• Real estate income: the tax rate is set at 20% for real estate income equal to or greater than 120,000 dirhams.
• Family charges: the tax reduction for family charges increases from 360 to 500 dirhams per dependent person, up to a limit of six people.