Morocco Proposes Tax Reforms for 2020: VAT, Import Duties, and Beverage Taxes Set to Change

According to L’Economiste, "the proposals would already be ready" and it only remains to validate them. The newspaper states that in addition to the taxes mentioned, a new increase in the Domestic Consumption Tax (TIC) on flavored and sweetened carbonated and non-carbonated beverages is also under consideration.

Yet these beverages had been subject to a 50% increase in the TIC on January 1, 2019. The same source identifies other sectors that would also be affected, including biscuits and chocolate. This decision by the authorities would be explained by the preservation of public health.

Indeed, "the progressive taxation of new products according to their sugar content is linked to public health reasons, especially in the face of the increase in the number of diabetics and the rise in morbid obesity," it is argued.

In addition, "the 2020 Finance Act could be, if the Government has the courage, that of the convergence of VAT rates towards two, or even three rates: 0%, 10 and 20%". In other words, "the products subject to 14% could either go up to 20%, or down to 10%, and those at 7% could either benefit from the zero rate, or go up to 10%".

Some exemptions could be removed, such as "the extension of the scope of VAT to all economic activities, as well as the exemption or the application of the zero rate to operations currently outside the field".

Through this battery of measures, the Government intends "to protect local production and promote industry by lowering the tariff on certain inputs," notes L’Economiste.