Morocco Plans VAT Cut on Essential Goods to Ease Household Costs

Fouzi Lekjaa, the minister delegate in charge of the Budget, recently announced an upcoming reduction in VAT on basic products, such as medicines and school supplies, according to Finance News. This measure is part of a broader tax reform aimed at restoring the neutrality of VAT. It will be implemented as part of the 2024 Finance Act. In addition, a fight against the informal sector, considered a hindrance to the national economy, has also been announced by the minister.

However, according to experts cited by the weekly, the battle against the informal economy cannot be limited to changes in VAT. Other levers of action such as improving access to financing, expanding social coverage, setting up appropriate training or reducing administrative burdens can be considered.

For his part, economist Najib Saouma advocates the establishment of more flexible tax mechanisms to encourage the transition to the formal sector.