By Loubna Flah
Morocco World News
Casablanca, April 24, 2013
The minister of economy and finance, Nizar Baraka sounded clear and firm during the last parliamentary session when he announced that Morocco is facing a serious economic downturn and may be closer than ever to the danger zone as reported by the Moroccan daily al Massae on Tuesday. Thus, Nizar Baraka is the first government official to admit before the legislative house that the Moroccan economy is on the edge.
Baraka called on all Moroccan citizens to pay their taxes in order to pump more asserts into the” impoverished “state budget. In his address in to the parliament, Baraka said” I am calling on all citizens to pay what they owe to the state, only the taxes since we exempted them from paying tax penalties. This measure will enable us to face our economic troubles”.
Tax evasion has always s been an impediment to economic growth in Morocco, which has cost the government‘s budget dozen of billion Dirhams. The former government, led by Abbas el Fassi, have always warned against the detrimental effects of tax evasion on public spending. Abbas Al Fassi had said once that 50% of Moroccans either evade or delay paying taxes.
Many experts ascribe tax evasion in Morocco to an array of factors, including institutional and legal hurdles, as well as the inadequacy of the supervision and audit mechanisms. The lack of awareness about the role of taxes in the sustainability of the state is another major factor that bolsters this practice.
To face this steep downturn, the government is trying to create an occasional tax haven by reducing taxes considerably to convince Moroccans to pay their taxes. Though Baraka did not announce any deadline, his offer seems to be the first step of a Tax amnesty, an opportunity for Moroccans to pay their taxes very soon in exchange for forgiveness of tax liability, including interest and penalties .
It is noteworthy that the government’s strategy to face tax evasion has precipitated a severe liquidity strain in the Moroccan banking system. The crisis was initially engendered by a massive withdrawal of assets from the business circle. The panic prevailed among clients when the General Directorate for Taxes launched a large scale seizure operation on their bank accounts without a prior notice.
It is clear now that the government has moved from its buoyant declarations and unrealistic growth figures to more realistic statements. Nonetheless, the generosity of Baraka’s offer is an indisputable harbinger that the government is laying its last cards on the table in the midst of a big economic mess.
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