Morocco Debates Tax Reform for Self-Employed Workers in 2024 Budget

One of the opposition groups’ proposed amendments to the 2024 Finance Bill is an argument in favor of self-employed workers subject to income tax based on their annual turnover, set at 1%. If they achieve an annual turnover for services provided to the same client exceeding 80,000 dirhams, they are required to pay a 30% income tax, withheld at source. The Popular Movement (MP) group calls for expanding the income tax exemption for these self-employed workers. They suggest a minimum threshold of 100,000 dirhams instead of 80,000 dirhams. This proposal aims to "further encourage self-employed workers by expanding the scope of income tax exemption, proposing that the amount exceeding 100,000 dirhams be subject to income tax, withheld at source, instead of 80,000 dirhams."

The Socialist group is looking in the same direction. According to them, this amendment aims to "encourage engagement in the organized economy sector and limit the phenomenon of the informal economy, in addition to improving the attractiveness of the self-employed regime to contribute to job creation and the reduction of unemployment, which has increased considerably in recent years." As for the parliamentary group of the Party of Justice and Development (PJD), it calls for "removing the provision that stipulates a ceiling on the turnover for the self-employed." It justifies its proposal by "a slowdown in the pace of engagement in this regime, particularly because the expenses it generates are very low compared to the limited number of jobs it creates."

Self-employed workers are the big losers of Law No. 114-13 of February 19, 2015. They are hired by company managers who require them to register in the National Self-Employed Register (RNA). This means that they must pay 1% VAT per year for a turnover capped at 200,000 dirhams, in exchange for the compensation they receive from their employers. In addition to this tax measure, the 2023 General Tax Code (CGI) in its Article 43 bis introduces a 30% liberating tax rate withheld at source by the client. This provision applies to any self-employed worker who has achieved a turnover exceeding 80,000 dirhams. However, this tax rate applies to the surplus. While the company pays its taxes based on its net profit, after deducting all its expenses, the self-employed worker regularizes his tax situation by calculating the tax rate on his turnover.