Morocco to Raise Soda Tax in 2020 as Part of Health Initiative

The Domestic Consumption Tax (TIC) on sodas and sweetened beverages will undoubtedly be revised upwards as of next year, according to the revisions contained in the draft finance law. There is only one last step to be taken for this increase to be effective in 2020.

L’Economiste recalls that these beverages had been subject to a 50% increase in the TIC on January 1, 2019, due to a preventive action against the health consequences related to sugar.

Similarly, the progressive taxation of new products based on their sugar content is explained by public health issues. In total, nearly 2.5 million people suffer from diabetes in the Kingdom.

According to a study conducted by the High Commission for Planning in 2016, 10 million Moroccans were overweight, including 3.6 million in a state of morbid obesity.

The newspaper also notes that the 2020 finance law could lead to the convergence of VAT rates towards two, or even three rates: 0%, 10 and 20%. Also, some products currently subject to a 14% import VAT could either move to 20% or drop to 10%.

Those at a 7% VAT rate could either benefit from the zero rate or move to 10%. The elimination of certain exemptions could also take place in accordance with the recommendations of the tax conferences.

Regarding import duties, they will undergo changes, which will protect local production and promote industry by lowering the tariff for certain inputs.