Morocco to Implement Minor Income Tax Cuts in 2025 Budget Plan

Fouzi Lekjaa, the delegate minister in charge of the Budget, recently confirmed, during a session at the House of Advisors, this revision of the income tax (IR), stressing that the measure aims to alleviate the tax burden on employees subject to withholding tax. But this downward revision of income tax in 2025 should not lead to major changes in salaries. It should result in small reductions ranging from 150 to 400 dirhams for the middle and underprivileged classes, estimates economist Mohamed Jadri interviewed by Le360.

"The government will have to keep the same level of IR revenue so as not to impact the Treasury’s cash flow, which relies heavily on these resources to finance the ongoing projects," explains the expert. In 2023, IR revenues represented 18.53% of total tax revenues, reaching more than 50.7 billion dirhams (MMDH), an increase of 5.8% compared to 2022. As of the end of July 2024, these revenues have exceeded 35 MMDH, up 11.9% year-on-year, according to updated data from the General Treasury of the Kingdom. The government expects IR revenues of 52.88 MMDH at the end of the fiscal year.

For economist Nabil Adel, this measure is a "fiscal rearrangement" and not a "tax reform" aimed at broadening the tax base by integrating employees who do not pay income tax, particularly those in the agricultural sector or the informal sector, or practicing liberal professions. A reform worthy of the name "requires political courage that this government, very concerned about its image, which does not want to displease and which does not stand up to pressure, lacks. It is enough to often go on strike for it to give in," he comments.