80% of revenue taxpayers set to be exempt below 2025 Finance Regulation

 Minister Delegate to the Minister of Economy and Finance chargeable for the Budget, Faouzi Lekjaa signaled “positive” developments relating to the continuing tax reform course of below the present authorities.

He mentioned that the “forthcoming income tax (IR) reform, outlined in the draft 2025 finance law, which is currently under discussion and set for a vote in the House of Councilors, will significantly broaden the exemption threshold, raising the proportion of individuals exempt from income tax to 80%.”

“Through the second reading of the draft finance law, we will endeavor to introduce a reform targeting a group of considerable importance to all of you: retirees,” he mentioned alluding to the potential for “exempting pensions from tax deductions.”

In response to questions from 5 parliamentary teams on the completion of the federal government’s tax reform agenda, Lekjaa elaborated on Monday night, December 2, that “the draft 2025 finance law proposes a reform of the income tax system, revising the tax brackets such that incomes below 6,000 dirhams will be exempt from taxes, thus raising the exemption rate to 80%.”

He harassed that this reform is “crucial to alleviating the tax burden on low and middle-income earners.”

The Minister additional famous, “This reform is expected to cost over 5 billion and 205 million dirhams. If all goes as planned, the second reading will incorporate a reform you have specifically requested, and we will attempt to include it in this draft. It concerns a demographic that commands your attention—retirees.”

The authorities accepted amendments put ahead by each parliamentary teams and the General Confederation of Moroccan Enterprises, which referred to as for the total exemption of pensions and revenue obtained below the essential pension system from revenue tax. These amendments had been handed through the vote on the 2025 finance regulation within the second chamber of Parliament.

Lekjaa additionally underscored the constructive fiscal outcomes ensuing from tax reforms, stating that “the reforms, guided by the framework law on tax reform—stemming from the national debates in 2019—have resulted in a remarkable increase in state tax revenues, rising from 201 billion dirhams in 2021 to more than 329 billion dirhams in 2025, representing an increase of 127 billion dirhams, or over 63%.”

He emphasised that “the key achievement lies in the fact that this surge in revenue was attained through an expanded tax base and the implementation of withholding at source, avoiding the need for additional tax burdens.” He additionally indicated that, if the present pattern persists, the federal government goals to double tax revenues by means of the 2026 finance regulation.

In addition to being “fundamental, structural reforms for public finances in Morocco,” Lekjaa identified that these measures have been accompanied by efforts to “enhance tax transparency and accessibility,” in addition to to “simplify administrative procedures.”

He additionally highlighted the federal government’s dedication to combating tax evasion by bettering tax audit procedures and steadily implementing the withholding tax system. He famous, “Many harmful practices that undermined the national economy and business transparency were linked to invoicing practices, particularly regarding value-added tax.”

Several parliamentary teams, each from the bulk and the opposition, praised the federal government’s responsiveness to tax reform proposals, notably when it comes to unifying tax methods for native tax assortment in regional municipalities.

In response, Lekjaa said, “we intend to make local taxes a tool for local development, not the reverse.” He emphasised that the Moroccan tax administration is working to “broadly incorporate information technology into its operations to improve efficiency, enhance control, and simplify procedures for taxpayers.”

He concluded by asserting that “taxes, as a mechanism for promoting social justice in line with the constitution and global standards, will enable the government to redistribute wealth to lower-income groups through direct social support and improve aid directed at marginalized populations.”

The Democratic Confederation of Labour, in its amendments to the 2025 finance regulation, proposed exempting retirees’ pensions from revenue tax.

This proposal was echoed by the National Union of Labour in Morocco, which additionally advocated for including pensions to the listing of tax-exempt classes to “improve the living conditions of this group,” throughout discussions of the finance invoice within the second chamber of Parliament.