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Rabat – Minister of Economy Nadia Fettah Alaoui has said that the government’s tax reform will have no impact on Moroccans purchasing power.
Speaking earlier today during a parliament session, the minister commented on a presentation made by the Supreme Audit Board, stressing the reform’s positive reflection on the prices of essential goods.
The board’s presentation recommended conducting periodic assessment of the effects of changes in Value-Added Tax rates on prices, as well as their impact on citizens’ purchasing power.
In response, Minister Alaoui said that the proposed exception from value added tax as outlined in the 2024 Finance law did not “touch the neutrality of this tax and is expected to have a positive impact on the purchasing power of households for various reasons.”
The value added tax reform is expected to result in a complete exemption from January 2024 for some widely consumed basic goods that are subjected to tax rates of 14 and 7 %, the minister argued.
She added that there will also be a gradual reduction in the tax rate for other products from 10 to 14%.
This will “lead to an improvement in the purchasing power,” Minister Alaoui said, adding that the measure will also contribute to reducing the cost of tax price structures.
She also shared data indicating a 6.6% decrease in tax expenditures, which amounted to MAD 35 billion last year compared to MAD 37 billion in 2022.
As part of its 2024 Finance Law, the Moroccan government has sought to reduce the tax burden on national purchasing power by lowering the VAT on a wide range of essential consumer goods, including medication and food products among others.
Read Also: Morocco Extends Tax Exemption to Cover Essential Consumer Goods
