DBB 2023: Liberal professions rebel

Lawyers, architects, notaries, chartered accountants, and adouls (religious/court notaries) are determined to block a tax measure provided for in the Draft Budget Bill (DBB). This is the mandatory withholding tax of 20% on the fees paid to the concerned liberal professions by their clients, natural and legal persons, under public or private law. The national council of the Professional organization of chartered accountants held a meeting with the Bar Association on Sunday, October 30, in Casablanca.

After discussion about the controversial tax provision, the two entities spoke with the presidents of the organizations representing the architects, the notaries, as well as the adouls who expressed their will to contribute to the creation at the national level of a coordination to form common front against the measure provided for in the draft budget bill. The professional organizations have already agreed on an action plan to counter the withholding tax on fees. Joint sit-ins were to be held in front of the regional tax authorities’ offices, said the people in charge. Sporadic strikes should also take place like the one that lawyers in the Tangiers region were planning to organize on Tuesday, November 01, accompanied by a demonstration from 11 a.m. to noon within the premises of the Court of Appeal. The mandatory withholding tax on fees paid to the liberal professions, with the exception of doctors, is the main measure which has thus aroused anger. This mandatory withholding tax targets all service providers registered for business tax, legal or natural persons, keeping accounts and receiving fees, commissions or brokerage and any other category of similar remuneration. Each customer keeping accounts will therefore have to deduct 20% from each invoice. The amount of the withholding tax will have to be charged to the income tax or to the corporate tax for the year. In the event of overpayment, the taxpayer concerned would benefit from a right to restitution. Why so many complaints about this measure? It is because it relates to the turnover and not the margin, specify experts. This should weigh heavily on the cash flow of the taxpayers concerned, especially in these times when there is strong tension on the business and the extension of deadlines. “This measure would put the majority of service providers in cessation of payment, most of whose turnover is absorbed by salaries, including that of the company manager, rents and other operating expenses”, warns an accountant. Deputies have already been made aware of the implications of the system device. According to one adviser, this provision would only encourage undeclared benefits to evade taxes. And to add that the high rate of the withholding tax would generate a large flow of refund requests that the tax administration could not process within a reasonable time. This would aggravate the cash flow difficulties of businesses.

Hassan EL ARIF