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Rabat – Morocco is deliberating a potential cut on income tax as part of the 2025 budget, Government Spokesperson Mustafa Baitas said during a press briefing on Thursday.
Currently, Morocco adopts a progressive income tax ranging from 0% for annual income below MAD 30,000 ($2,900) to 38% for annual income exceeding MAD 180,000 ($17,700).
Converging reports indicate that Baitas clarified that talks regarding this tax reduction are slated for 2024, with intentions to implement the changes in 2025.
The primary focus behind this proposed adjustment is to bolster support for the middle class, especially following a series of strikes aimed at addressing wage issues and grappling with the surging inflation rates.
Meanwhile, the government has outlined intentions to gradually phase out subsidies for cooking gas starting in the upcoming year. The government is looking to replace the general gas subsidies with direct cash allowances which would benefit approximately 60% of the families in need.
The decision aims to reduce the burden of subsidies by making their distribution more efficient.
In October 2022, Morocco’s Economy and Finance Minister revealed that the government was expected to spend MAD 3.1 billion ($281.5 million) on subsidizing wheat in 2023.
While presenting the highlights of the 2023 state budget, the minister said that the cost of subsidizing basic food and energy commodities would skyrocket by 72% in 2023.
The estimate for next year does not factor in the direct aid transportation professionals receive. Noting the historic rise in state subsidies for gas for domestic purposes, the minister explained that in the course of the first nine months of 2022, gas subsidies rose by 70%. The subsidies fund currently covers MAD 97 ($9) out of the total cost of a 12-kilogram gas bottle.
Read Also: Morocco Allocates $2.3 Billion to Subsidize Basic Food, Energy Products in 2023
