Morocco Tax Reform: New Withholding Rule Puts Companies on Alert

During a meeting with the business community (CGEM), Director General of Taxes, Younes Idrissi Kaitouni, justified this mechanism, which is becoming the centerpiece of a reform that brought tax revenues to 291 billion dirhams in 2025. Over five years, revenues surged by 74%, driven notably by corporate tax. “Withholding tax was never an end in itself […] it is a means of preventing tax fraud,” the official stressed.

On Bladi.net : Morocco: The new VAT withholding tax is coming, what will change for businesses

The private sector nevertheless fears that extending this levy to companies generating more than 200 million dirhams in revenue could suffocate the cash flow of formal operators. In response, the DGI has pledged to make VAT refunds more automatic. “Not a single dirham recovered through a tax audit will be used to fund the state budget,” Idrissi Kaitouni promised, assuring that these funds will systematically be reinjected into the economy through refunds.

On Bladi.net : Morocco’s Tax Revolution: Big Business Faces New Withholding Rules

This final budget of the Akhannouch government, which entered into force on 1 January 2026, confirms a profound transformation of the national tax system. While withholding tax primarily targets high-value-added services, the administration is preparing a specific circular to regulate these new flows. The challenge for Rabat remains securing the tax base without undermining the competitiveness of the 1 655 large companies now responsible for applying these withholdings.