The most heterogeneous coalition against the draft budget bill
It is certainly the most heterogeneous coalition that has ever been formed to protest against certain tax measures of Draft Budget Bill 2023. The meeting held last week by the group of liberal professions (associations of pharmacists, dentists, veterinarians, opticians, physiotherapists, accountants, etc.) aimed to adopt a common position to block the way to certain tax provisions.
“These provisions are likely to destabilize many sectors”, experts point out. The group asks the government to backtrack on raising the corporate tax rate from 10% to 20% over four years for net profits up to 300,000 MAD (about 30.000 USD), a scale that had been set up to encourage operators from the informal sector to the formal economy and more transparency via a tax rate reduced to 10%, but for some reason, the legislators changed their minds and decided to gradually phase out this scale in 2026. For the group of associations, “the 10% rate should be maintained because it targets small and very small businesses”. To support their request, the professional associations invoke the provisions of the Constitution which stipulate that citizens must pay taxes according to their ability to pay. The group of professional associations also recalls that the framework law on tax reform number 69-19 “provides for the establishment of a new effective, fair, equitable, and balanced tax system”. “A tax scheme which encourages investment and consolidates tax justice and social solidarity, and which contributes to the broadening of the tax base to reduce the burden on taxpayers”. The 20% withholding tax on professional fees and all other categories of remuneration paid to service providers is also part of the tax measures reviewed during the meeting. And as was to be expected, the group of associations is asking for the outright withdrawal of this measure, which involves the levy of 20% on turnover. This is certainly the extent that the operators are unanimous in calling for the withdrawal. The group of liberal professions, which also decries the rise in the VAT rate to 20% instead of the current 10%, is asking the government to renew dialogue with professional associations to find common ground on tax reform. This complaint comes too late since the Draft Budget Bill was to be voted on Wednesday, November 9, unless one lobbies the members of the House of Councillors, including several groupings (professional chambers and parliamentary group of employers) representing the business community.
Hassan EL ARIF
