Draft Budget Bill: Your salary in 2023

Promises only bind those who believe in them, the employees will have to get over it. The 2023 Draft Budget Bill only includes one measure concerning them, namely the increase in the flat rate of deduction of professional expenses from 20% to 35% for employees whose gross annual taxable income is less than or equal to 78,000 Dirhams (about 7,800 USD). For these employees, the maximum deduction remained unchanged and capped at 30,000 MAD (3,000 USD) per year. For people whose gross annual taxable income is greater than 78,000 MAD, this flat rate goes from 20% to 25% with an increase in the deduction ceiling from 30,000 to 35,000 MAD per year (article 59-IA and B of the General Code of Taxes). The future deduction base will obviously apply to income generated from January 1, 2023.
According to the simulations that L’Economiste has requested from accounting firms, the impact of this change is minimal. Thus, for people receiving a gross annual salary of 36,000 MAD, the gain will obviously be zero, since they are already tax exempt. Beyond that amount, earnings will vary according to the taxable gross salary brackets: 43.04 MAD per month, for example, for 4,000 MAD monthly salary, and 169.99 MAD per month for 10,000 MAD monthly salary. People paid up to exactly 11,666 MAD gross will see their payslip increase by 198.32 MAD. This is the peak of earnings. At 18,600 MAD gross monthly salary, the maximum gain will be 154 MAD. For people receiving high salaries, the differential due to the change in the rate of deduction of professional expenses will stabilize at a maximum of 158.33 MAD, regardless of the level of monthly remuneration. This is therefore not what will make households richer. People who therefore had purchase projects, and who were relying on a tax measure, will have to postpone such projects. Indeed, instead of acting on the income tax grid, the government has opted to raise the ceiling for the deduction of professional expenses because of its minimal impact on Treasury revenue.
However, in the presentation note of the Draft Budget Bill, the Ministry of Finance explains that this provision comes  “in the context of the implementation of the government’s commitments resulting from the social dialogue aimed at improving the power of purchase of employees” . Except that the increase in the rate of deduction of expenses related to the function or employment will not contribute to achieving this goal since the gains made, which are insignificant by the way, will not necessarily be passed on to employees. This is a measure that should ultimately benefit employers, especially since there is no legal basis forcing them to allow their employees to benefit from the increase in the deduction scale for professional expenses. As a reminder, the costs related to a specific function or job must not be confused with the expenses incurred by employees in the context of their work (fuel, hotel, catering bills, etc. .) and for which they request reimbursement from their employer subject to providing supporting documents. These costs actually correspond to an allowance that the payroll calculation software takes into account to determine the tax base.
Hassan EL ARIF