Morocco's Boussaid Presents Highlights Of 2014 Budget
16 January 2014
Posted by: Author: Lorys Charalambous
Author: Lorys Charalambous (Tax-news.com)
During a recent press conference, Moroccan Finance Minister Mohamed Boussaid presented details of the country's 2014 finance law (LF 2014), insisting that the legislation is designed to support both citizens and businesses in Morocco, to strengthen social cohesion, to promote employment, and to boost investment.
Measures provided for in the LF 2014, intended to support individuals, include plans to extend the suspension of import duty imposed on soft wheat and its derivatives from January 1 to April 30, 2014.
Provisions contained in the law designed to benefit enterprises, include plans to exempt material imported temporarily, and used in the production of goods destined for export, from the payment of duties and taxes, provided that at least 75 percent of those goods are exported. Other initiatives include plans to guarantee fiscal neutrality in cases where individuals, for example farmers, adopt a company status and become subject to corporation tax.
Furthermore, the LF 2014 creates the new fiscal regime of "auto-entrepreneur," applicable to individuals whose annual turnover does not exceed MAD500,000 (USD60,680) for commercial, industrial, and artisanal activities undertaken, and where yearly turnover does not surpass MAD200,000 for the provision of services. Under the "auto-entrepreneur" status, individuals will be subject to income tax at a rate of 1 or 2 percent of turnover, depending on the activity.
Finally, the finance law strengthens resources flowing to the country's social cohesion fund. Consequently, 50 percent of the product of the Government's air passenger ticket tax, imposed on international flights departing from Morocco, will be allocated to the fund, together with the yield from the contribution levied on the real estate and financial assets of Moroccan residents held abroad.
According to Moroccan Finance Minister Boussaid, the Government aims to progressively reduce the budget deficit to 3.5 percent of gross domestic product (GDP) by 2016. The objective is to improve revenue collection by widening the tax base, by progressively abolishing tax breaks, and by recovering outstanding taxes.
Alluding to the envisaged reform of taxation, Finance Minister Boussaid reiterated that the goal is to ensure a fair tax system, to increase the competitiveness of companies in Morocco, and to improve trust between the Tax Administration and citizens.
Within the framework of the future tax reform, the Government intends to radically overhaul the value-added tax (VAT) system, notably by progressively aligning the VAT rates, and eventually limiting the number of rates to two, namely a 10 percent and 20 percent rate of VAT.
This article first appeared on tax-news.com.