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Rabat – Morocco’s 2025 Finance Bill is bringing major reform, gradually eliminating income tax on pensions and annuities. Starting in 2025, retirees will see a 50% tax reduction, leading to full exemption by January 2026.
Mustapha Baitas, government spokesperson and Minister Delegate for Relations with Parliament, announced that the reform will benefit 164,744 retirees and cost approximately MAD 1.2 billion ($118 million).
Speaking after Thursday’s Government Council meeting, Baitas noted that nearly 86% of beneficiaries are registered with the Moroccan Pension Fund (CMR), reflecting the government’s broader efforts to revamp fiscal policies.
This reform is part of Morocco’s ongoing overhaul of its income tax system. The 2024 Finance Bill had already eased the tax burden on public sector employees, costing the state around MAD 5 billion ($493 million).
However, Baitas noted that public servants historically shouldered most of the income tax burden due to gaps in the system that allowed other sectors to avoid contributions.
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To correct this imbalance, the government has introduced reforms to expand the tax base, ensuring that previously exempt sectors now contribute—an essential step toward creating a fairer and more inclusive tax system.
Public servants and salaried employees now benefit from an average tax reduction of MAD 400 ($39), as the government works to both ease the burden on compliant taxpayers and expand its revenue sources.
Baitas underlined that these efforts align with recommendations from Morocco’s National Tax Conference and the fiscal reform framework law, aiming to reduce pressure on consistent contributors while integrating historically untapped sectors into the system.
“This initiative goes beyond tax relief—it’s about fairness. We’re bringing new contributors into the fold while supporting those who have shouldered the load for years,” he explained.
The exemption of pensions and annuities mirrors a broader economic strategy to balance immediate relief for retirees with sustainable fiscal reforms.
Budget Minister Delegate Fouzi Lekjaa, speaking earlier this month in Parliament, reiterated the government’s commitment to social equity, noting its readiness to absorb the financial cost of the reform to support vulnerable groups.
“We aim to include a wider range of retirees during the second review of the 2025 Finance Bill,” Lekjaa assured, acknowledging areas for improvement in the initial plan.
