Rabat – Under the new 2024 budget bill, the Moroccan government has proposed to generalize the exemption from the Value Added Tax (VAT) to cover a wide range of essential consumer goods.
The tax exemption would include all medicines and their sub-components, as well as single-use packaging.
In addition, it would extend to school supplies as well as products and materials used in their production.
The measure would also extend to some food products including butter derived from animal milk, canned sardines, and powdered milk.
Beyond consumer goods, the tax reforms include provisions that would incentivize businesses to boost green energy production, as VAT on the production of electricity from renewable sources is set to decrease from 14% to 12% starting January 1, 2024.
Insurance companies are also poised to benefit from a tax cut as the VAT rate on services provided to insurance companies by brokers or insurance agents would similarly fall from 14% to 12% starting January 1, 2024.
Meanwhile, tax reforms are set to scale VAT taxes on a number of consumer goods that the government had previously deemed hazardous to public health, including a one-point hike on refined sugar to 8% at the start of 2024.
Likewise, VAT on economical cars – vehicles designed for low-cost purchase and operation – is set to rise from 7% to 10% starting January 1.
VAT rates on passenger and freight transport operations are equally set to increase from 14% to 16% starting January 1.
Earlier today, reports indicated that despite the proposed draft, the government is heading toward reversing its decision to hike taxes on public transit and utility bills.
The current draft bill proposes a tax hike from 14% to 16% for electricity, and from 14% to 16% for electricity meter rentals. Taxes on passenger and freight transport operations were set to see an increase from 14% to 16%.
Following a meeting between the Minister of Economy and Finance Nadia Fettah, and the Minister Delegate in charge of the budget Fouzi Lekjaa, with the heads of majority parties in parliament, the government is revising the measure in an attempt to preserve the national purchasing power.
Source : Morocco World News