Tax incentives in Morocco

Abstract

Incentive taxation refers to all tax levies intended to guide the behavior of people likely to be subject to them. In principle, a tax measure is intended to provide resources to public entities to finance their activities of general interest. So ; taxation is said to be “incentive” or “behavioral” when through its measures its main aim is not to collect resources, but to guide the behavior of people likely to be subject to it.

According to the definition given by the OECD, in a “transfer of public resources resulting from a reduction in tax obligations relative to a standard, rather than from a direct expenditure”. It is therefore a total or partial renunciation of certain taxes, which deviate from the general tax system, with the aim of encouraging economic agents to direct their investments or activities according to government, economic, social or cultural priorities.

In Morocco, preferential measures, dedicated to agriculture, were the first incentives decided by the public authorities. Since then, multiple texts with a sectoral vocation have been instituted. Thus, these incentive measures affected both industrial, mining, tourist and artisanal investments, as well as exporting companies operating in the industrial and artisanal field, to extend, in 1977, to commercial exporting companies. All of the texts governing incentive provisions, except those concerning the export and craft sectors, have been modified numerous times. In 1992, other exemption regimes emerged in favor of banks and holding companies established in offshore financial centers. In 1995, this regime was supplemented by an incentive measure in favor of companies established within the perimeter of export processing zones.

The tax incentive was often omnipresent under the Protectorate and continued to impose itself, par excellence after Independence, as a public policy instrument of capital importance. He accompanied the process of colonial detachment at the political and economic level. Thus, and since Independence, public authorities have tackled the various issues linked to investments head on by adopting a preferential exemption system systematically grouped in investment codes.

The objective of this article is to clearly understand what incentive taxation has been applied in Morocco since independence to the present day; to know : Define what is an incentive tax system; Incentive tax arrangements; Incentive taxation in Morocco

Keywords: tax incentives-

Classification: JEL: H2-H7

Article type: Descriptive and comparative research