Taxes: The social contribution renewed in 2023

If there was any doubt as to the fate of the social solidarity contribution planned until the end of 2022, such a doubt has just been lifted. Fouzi Lekjaâ, Minister Delegate for the Budget, has just announced that the measure will indeed be renewed in the 2023 Appropriations Bill. The information is not really a surprise since the social solidarity contribution, introduced for the first time in 2013, has been renewed on a regular basis in recent years in the Appropriations Bills. The Minister justified the maintenance of the social solidarity contribution by the Government’s desire to provide a source of financing for the generalization of social protection, the completion of which is planned by the end of 2025. This is a major project which will require no less than 14 billion MAD, and which should be financed, it seems, by the solidarity tax which brought the Treasury revenues of 4.44 billion MAD in 2021, an amount well below the financing needs. Should one infer from this that the tax schedule will this time be higher than in past years or that the tax will also be extended to salaries or other categories of income? The Moroccan employers’ association CGEM, which expected the lifting of this provision has not yet officially made a statement. In principle, it will soon make its position public. But members of the employers’ association are already protesting against the Government’s decision. “The social contribution was supposed to be exceptional in consideration of the impacts of Covid. Now the health crisis is over. The renewal of the social tax in 2023 therefore seems to us to be out of step with the essential causes. For companies already drained, which are currently facing rising costs, this is a real problem”, says a member of the board of directors of the employers’ confederation. The latter declares that it is necessary to wait to see the final configuration of the tax before formulating any observations. “Whether the solidarity contribution essentially affects the activities that have benefited the most from the coronavirus crisis and which generate exceptional surpluses, this seems obvious to us. On the other hand, if the solidarity contribution still has to affect SMEs which have made a small profit from 1 million MAD, this is unjustified because it is much more an accounting result than a profit”, warns our interlocutor. For 2022, the social contribution starts from a profit or income of 1 million MAD, taxed at 1.5%. Beyond 40 million MAD, the rate is 5%. According to statistics of the TGR (Treasury of the Kingdom), the social contribution brought in just over 4 billion MAD in 2021 versus 2.2 billion a year earlier. The social tax targets not only  companies that are subject to ordinary law but also the entities located in the financial center of Casablanca, and the  industrial acceleration zones (former free zones). The particularity of this measure in 2022 consists in the taxation of natural persons with professional income as defined by Articles 30 (1st and 2nd paragraph) and 46 of the General Tax Code and who are subject to the  income tax according to the actual net income regime. Are concerned pharmacists, accounting professionals, real estate developers, farmers with a turnover of more than 5 million Dirhams, and some other professions. Only about thirty entities benefiting from the exemption of the corporate tax on a permanent basis are exempt. Employees who have been spared this year could be called upon again to contribute in 2023. Companies benefiting from the exemption from corporate tax on a temporary basis were until then exempt from social tax. Will they be asked to contribute this time?

Hassan EL ARIF