• Rabat

  • Thursday, January 4, 2024 at 6:54 AM
    Last Update : Thursday, January 4, 2024 at 6:54 AM

Moroccans Welcome Government Review of Income Tax Cuts Amidst Inflation

(AWP) - The Moroccan government’s decision to ease citizens’ financial burdens by reducing income tax, part of its 2025 budget to confront inflation, was welcomed by employees and trade unions alike.

The Moroccan government’s spokesperson, Mustapha Baitas, had announced last month that the cabinet would discuss reducing income tax during the current year, for implementation in 2025.

Morocco imposes a progressive income tax of up to 38% on the wages of workers in the private and public sectors.
The decision comes amid demands to improve wages, as employees suffer from a decline in their purchasing power due to inflation, which is expected by the Bank of Morocco to reach 6.1% this year.

In their negotiations with the government, trade unions continued to call for the need to reduce income tax.

"Inflation can also be confronted by reducing taxes and reducing the income tax. It is inconceivable that in Morocco, the income tax for employees in the public and semi-public sectors still amounts to 38% of the wage. This is completely unacceptable, and is a high percentage for the region as well,” said Youssef Makouri, Regional Secretary of the Moroccan Labour Union.

While confirming that the measure falls within its pledges and reflects the outcome of dialogue with the unions, the Moroccan government has yet to reveal the exact level of income tax reduction.

According to Murad Alghmarti, an employee at the National Agency for Land Conservation, Cadastre and Mapping, there is a “notable tax distinction between the public and private sectors. For example, in private companies, there is 20%, while for public employees, it is 38%, which is a very large figure.”

“There must be at least a tax reduction and a wage increase, to confront the high cost of living,” he added.

The Moroccan government had confirmed an intention to activate the social support plan to protect citizens’ purchasing power by allocating 16 billion dirhams as part of the 2024 Finance Law, and by setting a price ceiling on gas cylinders.

According to government estimates, 60% of Moroccans will benefit this year from direct social support worth 25 billion dirhams, which will rise to 29 billion Dirhams in January 2026.

(US dollar = 9.94 Moroccan dirhams)