Morocco’s Self-Employment Law Favors Business Owners, Leaves Workers Vulnerable

The self-employed, the big losers of law no. 114-13 of February 19, 2015! They are hired by business leaders who require them to register with the national self-employed register (RNA). "The day I was hired, the boss explicitly asked me to register with the national self-employed register (RNA) in order to be able to take up the position. I accepted this arrangement, because I had been looking for a job for several months," confides to Maroc Hebdo Zouhair, a young cameraman-editor who works in the events sector. The same requirement applies to the other members of the team, also hired as self-employed. As a result, this employee is forced to pay 1% VAT per year for a turnover capped at 200,000 dirhams, in exchange for the compensation he receives from his employer. In addition to this tax measure, the 2023 General Tax Code (CGI) in its article 43 bis introduces a liberatory tax rate of 30% withheld at source by the client.

Any self-employed person who has achieved a turnover exceeding 80,000 dirhams is affected by this provision. However, this tax rate applies to the surplus. Measures that could hinder the achievement of the objectives set through law no. 114-13, namely to limit informal economic activities and fight against inequalities. "Companies are taking advantage of this to disengage from their responsibilities, reduce their tax bases, reduce employer contributions and sometimes inflate their expenses," summarizes Prof. Mohamed Adraoui, professor of finance at the Faculty of Economic, Legal and Social Sciences in Mohammedia, explaining that companies pay their taxes on the basis of their net income, after deducting all their expenses. As for the self-employed person, he regularizes his tax situation by calculating the tax rate on his turnover. "Normally, this status was designed to eradicate inequalities and not to exacerbate them further," he points out.

The government has revised the old version relating to the taxation of the self-employed regime, in order to remind business leaders to reason. However, this rearrangement does not really benefit those registered under this status - 406,301 registrations in 2022 against 363,663 in 2021 according to DGI data. According to Zakaria Fahim, president of the Union of Self-Employed Workers, this fiscal rearrangement will help deter dishonest business leaders, by drawing attention to the fate of true self-employed workers. "We are trying to impoverish them by limiting their turnover to 80,000 dirhams," he regrets, estimating that the tax measures recorded in the 2023 Finance Act are far from encouraging self-employed workers. "They now have to think twice before joining the formal sector. [...] These new provisions, although they may aim to strengthen the integration of the informal sector, are actually likely to deter potential entrepreneurs," he analyzes.

There is still hope. Fahim is convinced that accountants can play a strategic role in mentoring self-employed workers. "Accountants can, contrary to what they think, innovate new solutions and diversify their service offerings in order to help this category of entrepreneurs develop their activities by making available to them, among other things, a customer file corresponding to their sector of activity," he assures. Accountants don’t see it that way. "As an accountant, how does the self-employed segment concern me? We have much more important concerns than to be interested in this niche," bluntly affirms an accountant under the cover of anonymity.