President of the Moroccan general business federation CGEM, Miriem Bensalah-Chaqroun has warned that Morocco’s tax system is currently “unfair and marred by shortcomings.”
During her keynote address at the 2013 conference on taxation held in Skhirat, the CGEM president emphasized that although improvements have indeed been made in the area of taxation, many challenges lie ahead.
The Moroccan tax system has to ensure lasting state resources, and guarantee the future economic development of the Kingdom, Bensalah-Chaqroun stressed. While conceding that taxes and duties currently account for 85% of ordinary state budget revenues, compared to just 69% in 2001, the CGEM president nevertheless argued that the tax system remains profoundly unjust.
According to Bensalah-Chaqroun, only 2% of companies are currently responsible for 80% of corporate tax paid, wage deductions make up 73% of income tax, and two-thirds of companies report chronic deficits. Bensalah-Chaqroun pointed out that swathes of the economy – the informal economy – are still not subject to taxation.
Alluding to the importance of eradicating distortions within the tax system, the CGEM president underlined the need for a progressive corporate tax system to be introduced in Morocco, adapted according to the contributive capacity of each company, and for value-added tax (VAT) reimbursements to be settled on time, to ensure that VAT remains neutral for Moroccan businesses. Bensalah-Chaqroun also cited distortions in terms of state fiscal spending, with three sectors currently benefiting from 70% of the MAD36bn (USD4.3bn) allocated each year. The profound distrust between the tax administration and the taxpayer also needs to be urgently addressed, Bensalah-Chaqroun made clear.
Concluding, Bensalah-Chaqroun underlined the need for the Moroccan tax system to be transparent, competitive and equitable. Bensalah-Chaqroun explained that economic actors and investors need stability, consistency, and a healthy environment, that companies must be competitive and able to compete in a global market, and that taxation should encourage fair competition.
