Morocco considers measures to increase tax revenue

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RABAT, May 5 (Reuters) – The Moroccan government is mulling the introduction of new measures to increase the tax base in order to alleviate fiscal pressure on the middle class and increase funding for social services, Finance Minister Mohamed Benchaaboun said.

The measures aim at making the rich pay their “fair” share of taxes as well as fighting tax evasion and fraud, Benchaaboun said late on Saturday at the end of a national conference on taxation.

Income tax is disproportionately collected with 73 percent of revenue coming from taxing wages, Finance Ministry data showed.

“The average contribution of a wage-earner is five times higher than that of a self-employed,” Benchaaboun said. “This situation runs against the principle of fiscal justice, which should be amended by implementing the principle of equal income, equal taxes.”

Morocco collected 149.8 billion dirhams in net tax revenue in 2018, up 4.6 percent compared with 2017, the tax administration said.

The North African country’s fiscal system suffers from a high concentration as 50 percent of the income tax, company tax and VAT combined is paid by just 140 companies, according to official figures.

One percent of companies account for 80 percent of corporate tax revenue.

Morocco loses up to $2.45 billion due to tax evasion and fraud by multinationals, Oxfam said in a report last Monday.

The conference’s recommendations, which shall offer guiding principles for future budget laws, included establishing value added tax neutrality, tax progressivity as well as grouping local and parafiscal taxes in a single code.

Morocco, the most unequal country in North Africa, should also impose a wealth tax in order to bridge the gap between the rich and the poor, Oxfam expert Asmae Bouslamti told Reuters. (Reporting by Ahmed Eljechtimi Editing by Leslie Adler)

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