The tax reform is exemplary… and the government is facing rising prices

Nadia Fattah Al-Alawi, Minister of Economy and Finance, said, “The government is working on a number of measures to facilitate investment and encourage companies to do so, especially by reducing performance deadlines,” indicating its “success in this mission” by comparing the development of numbers in the period extending between the end of the year and 2018 and March 2024.

Fattah stated in her response to an oral question on the subject of “settlement of amounts owed to enterprises by ministries, public institutions and territorial communities,” yesterday, Tuesday, in the Council of Advisors, posed by the team of the General Confederation of Moroccan Enterprises, that “businesses’ dues to public enterprises have decreased approximately from about 18 billion dirhams.” To reach about 11 billion dirhams by the end of March 2024, adding that “the average performance deadlines decreased from 55 days at the end of 2018, and today we have reached approximately 35 days.”

The Minister of Finance also stated, in her response, that “80 percent of public institutions, or approximately 165 institutions, respect the legally stipulated 60-day deadline,” adding: “We are working on a number of measures, but the most important of them remains establishing the culture of paying dues. This is very important, through legal procedures so that we can determine the deadline for paying these dues.”

She also pointed out that “the role of the Performance Deadlines Observatory (created for this purpose) helps a lot in tracking the performance deadlines of public institutions and contractors, and as you can see, we update these numbers and data every three months,” adding that “the Ministry of Economy and Finance is aware of accelerating the payment of the budgets of ministries and institutions in order to Be able to ensure the necessary and sufficient liquidity to meet the deadline for payment of receivables.”

The same government official highlighted, speaking to members of the second legislative chamber, that “the real solution to the problem of performance and enhancing liquidity that stands in the way of small and medium-sized companies in particular, lies in digitization,” recalling in this context “the Ministry of Economy and Finance’s use of (the performance platform), which has known more than 300,000 operations were completed through it.”

Nadia Fattah did not fail to mention, in her answer, “the royal speech dated August 28, 2018, in which the King called on public institutions and enterprises, as well as territorial communities, to pay the dues to the enterprises on time, in order to maintain a strong entrepreneurial fabric,” considering that “the National Management Agency The strategy has membership in the Performance Deadlines Observatory. Because it has a special relationship with public institutions and contractors, so that it can help implement these reforms.”

“The tax reform is bold”

On another topic, the Minister of Economy and Finance noted “the implementation of the contents of the framework law related to tax reform,” describing it as “a model law that came as a result of a deep discussion that took many years, and today everyone is mobilized to implement this framework law that was agreed upon to be implemented within a period extending over five years.” “In the interim, all types of taxes are concerned.”

Fattah answered a question in this regard by saying: “This reform was not accompanied by additional tax pressure on those obligated to it, but rather an expansion of the tax base, which yielded positive results at the end of 2023, as tax revenues rose by 7 percent without additional tax pressure on companies and citizens alike.”

The government official recalled in detail the most important milestones that have silently implemented the tax reform in Morocco since the national debate in 2019, saying: “Last year, we touched on the corporate tax in order to simplify it, as we reached a unified tax rate of 20 percent. “I think it is a bold choice for the government, which the national economy was not expecting, but it would encourage investment.”

She continued, explaining: “In the Finance Law for the current year, the reform came to affect all citizens, which is the value-added tax, in a gradual manner over the horizon of 3 years, that is, by the fiscal year 2026,” stressing the government’s pursuit of “fiscal justice in this file, and its outlook.” to the purchasing power of citizens,” stating that “a number of items are currently subject to a 0 percent value-added tax.”

Fattah concluded that “the axis that is expected to be implemented is the tax on income and wages, which is a prominent point within the outcomes of the social dialogue round that produced a historic agreement signed before May 1, 2024.” She concluded: “With this, we will have completed the tax reform in its major contents and broad lines, giving a vision Clear for Moroccan enterprises.”

“Price reduction measures”

“Government measures taken to put an end to the rise in prices in Morocco,” a topic that aroused the interest of the advisors of the “action team” who asked the minister about it, who replied that “the rise in prices comes in an international context that has been known for years,” reasoning that “the government has taken measures to confront the rise in prices in our country.” By supporting consumer goods and improving income by increasing the wages of the working class, according to the outcomes of the social dialogue.”

The Minister of Finance did not fail to confirm “the continued role of the Clearing Fund, which contributed to supporting several basic materials,” citing numbered indicators indicating support for “butane gas with 26 billion dirhams and flour with 10 billion dirhams, in addition to supporting the transportation sector with 8 billion,” considering The latter is a “horizontal measure,” in addition to “the state’s support for the electricity sector with the aim of stabilizing its prices, as well as suspending customs duties on the import of a number of materials.”

She also pointed out that “health coverage, direct support for families, and raising wages are part of the government’s package of measures to confront rising prices,” reasoning that “the inflation index also witnessed a decline during the first three months of this year, and the measures taken by the government also contributed to a decline in prices.” A number of basic subjects in the current year.