Morocco Scraps Plan to Raise VAT on Water and Electricity Bills

The increase in VAT on water and electricity in the 2024 budget proposal, the first part of which was adopted in Parliament, is no longer on the agenda. According to the Minister of Economy and Finance, this decision was made following a meeting with the leaders of the ruling parties, reports Hespress. The government is therefore no longer considering increasing the VAT from 7% to 8% for water, sanitation services, and water meter rental, and from 14% to 16% for electricity, electric meter rental, as well as passenger and freight transport. This information was confirmed by the leaders of the Istiqlal Party (PI) and the Authenticity and Modernity Party (PAM) in the House of Representatives.

The government had also planned to gradually increase the VAT on water, sanitation services, and water meter rental from 7% to 10% by 2026, with rates of 8% in 2024, 9% in 2025, and 10% in 2026. Regarding the production of renewable electricity, a reduction in the VAT from 14% to 10% was planned, with rates of 12% in 2024 and 10% in 2025. Similarly, an increase in the VAT rate on refined sugar from 7% to 10%, on economical cars from 7% to 10%, and a decrease in the rate applied to insurance brokers or agents from 14% to 10% were planned.

In addition to the abandonment of the increase in water and electricity rates, Aziz Akhannouch and his team are also abandoning the 10% VAT on urban transport. This government decision comes to cut short the criticisms that were pouring in from all sides. A possible increase in public service bills was considered "unfair and detrimental to the purchasing power of citizens."