Revenues Rise, Spending Accelerates | L’Economiste

Amid growing expenditure pressures, the budget surplus has narrowed. As of the end of March 2025, Morocco’s public finances show a budget surplus of 5.9 billion dirhams – a sharp drop from the 16.8 billion recorded a year earlier. Gross ordinary revenues reached 113.9 billion dirhams, up 20.2% year-on-year.

This strong performance reflects the direct impact of Framework Law No. 69-19 on tax reform, notably through the consolidation of corporate income tax (CIT), the overhaul of value-added tax (VAT), and the targeted relief of personal income tax (PIT). Tax revenues amounted to 104.6 billion dirhams, a 24.2% increase.

Direct taxes were the main driver of this growth (+40.4%). CIT rose by 33.8% to reach 34.5 billion dirhams, despite high levels of tax refunds (2.3 billion), reflecting efforts to clear accumulated arrears. PIT grew by 43.7%, bolstered by the exceptional voluntary regularization operation provided under the 2024 Finance Act, which alone generated 3.8 billion dirhams.

Indirect taxation posted more moderate growth (+10%), driven by the domestic consumption tax (TIC) on energy products (+9.2%) and import VAT (+7%), while customs duties remained virtually flat (-0.2%).

Domestic VAT exhibited more mixed trends. While gross collections rose by 12.7% to 12.4 billion dirhams, net revenues fell by 7.4%, totaling 8.2 billion. This decline stems from a sharp increase in reimbursements, which nearly doubled year-on-year (+93.5%), reaching 4.26 billion dirhams from the state budget alone. Including contributions from local governments, reimbursements totaled 6.26 billion dirhams. This development reflects the active implementation of VAT reform commitments, aimed at restoring the tax’s neutrality, reducing accumulated credit, and improving business cash flow.

Non-tax revenues declined by 11.6%, affected by the drop in transfers from special Treasury accounts, debt reduction revenues, and earmarked funds. However, this decline was partially offset by strong performance from public monopolies (+83.9%), particularly Bank Al-Maghrib and the Land Registry Agency.

On the expenditure side, ordinary spending surged by 36.3%, reaching 103.2 billion dirhams. This increase was driven by a 13.8% rise in the public wage bill (43.9 billion dirhams), a sharp 63.8% increase in goods and services expenditure, and a 40.5% rise in interest payments – mainly on domestic debt. However, it is the spike in tax reimbursements, deductions, and refunds (+122.7%), totaling 6.8 billion dirhams, that exerted the heaviest pressure. Domestic VAT refunds (4.2 billion) and CIT refunds (2.3 billion) accounted for the majority. This catch-up effort, aligned with the commitments made at the 2019 National Tax Conference, contributes to rebuilding trust between the tax administration and the business sector while enhancing corporate liquidity.

Khadija MASMOUDI