Morocco’s Economic, Social, and Environmental Council (CESE) has suggested reducing income taxes for low-income workers and increasing them for high-earning individuals.
According to the CESE, the change would make Morocco’s income taxes more “progressive” and support low-income Moroccans without significantly hindering the country’s tax revenue.
The consultative institution presented the suggestion, among others, in a study about “the health, economic, and social impacts of the COVID-19 pandemic and the means to overcome them.” The CESE published the results of its study on November 5 in a 131-page report.
The council suggested that reducing taxes for lower-income employees would improve their resilience to future economic crises in Morocco, especially as they are the most vulnerable to job losses.
Universal basic income project
The CESE also recommended studying the possibility of implementing a universal basic income program in Morocco. Despite its high cost, the council believes that the initiative would significantly curb the socio-economic vulnerability of Moroccans. Universal basic income should especially benefit Moroccans with special needs, the CESE encouraged.
However, to avoid “inappropriate behaviors,” such as individuals exclusively relying on financial aid instead of working, the council suggested making the basic income provided by the program lower than Morocco’s Interprofessional Guaranteed Minimum Wage (SMIG). The minimum wage in Morocco currently stands at MAD 2,638 ($288) per month.
To accurately study the feasibility of the mechanism, the CESE suggested launching a pilot project in one of Morocco’s regions.
The council encouraged the Moroccan government to accelerate the projects of Morocco’s Unique Social Register (RSU) and the National Register of the Population (RNP). The two registers will significantly improve the targeting of the potential universal basic income program’s beneficiaries.
The Moroccan government should also focus on a universal social security system and a compensation for job loss program in order to improve the socio-economic stability of Moroccans, the CESE urged.
In order to put in place a generalized social security scheme, the council suggested transferring 2.0 to 4.0 basis points of Morocco’s value-added tax (VAT) towards a social solidarity fund. The fund would then finance social coverage for all Moroccans.
Established in 2011 through a royal decree, the CESE is an independent consultative institution. Its role is studying Morocco’s socio-economic environment and presenting recommendations to the Moroccan government and Parliament.
The CESE’s recent recommendations echo King Mohammed VI’s calls in his 21st Throne Day speech and at the inauguration of the 2020-2021 legislative year. On both occasions, the King urged the government to work on the generalization of social security, so that all Moroccans can benefit from it in less than five years.