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Morocco Eyes Tax On Wealth

by Lorys Charalambous,, Cyprus

26 November 2012

Morocco's Finance Minister Nizar Baraka has recently underlined the need for the government to examine both the "feasibility and the profitability" of a tax on wealth before any such tax is introduced in Morocco.

Commenting on the country's 2013 finance bill, Baraka indicated that the government would first have to thoroughly consider the idea of applying a wealth tax in Morocco, to ensure that this would not merely lead to a flight of capital or serve to adversely affect investment.

Underscoring that it is not simply "a question of courage," the minister insisted that the government would have to make sure that the tax could be adapted to Moroccan society. Given the potential effect of the levy on productive capital investment, the government must analyze data from other countries, Baraka said, pointing out that some countries have decided to abolish the tax,.

Regarding the government's draft budget for next year, Baraka highlighted the fact that the bill introduces certain advantages aimed at facilitating access to housing for the country's middle class, applicable to citizens whose net monthly income does not exceed MAD15,000 (USD1,735).

According to Baraka, the bill extends until December 31, 2020, tax exemptions accorded for low-value housing construction programs aimed at the country's poorest. The tax benefits, accorded to property developers contracted by the state to build 300 houses over a period of five years, include exemption from registration fees, from stamp duty, and exemption from land conservation fees.

At the beginning of the month, Baraka highlighted the fact that the fiscal provisions contained in the 2013 finance bill demonstrate the government's firm commitment to reducing the country's budget deficit and to containing expenditure.

Baraka alluded to the "exceptional contribution" to be imposed for a period of three years on top income earners and on companies realizing large profits, designed to benefit the poor, namely those "most exposed to the crisis" in Morocco.

TAGS: Morocco | Finance | tax | investment | budget | fees | stamp duty | tax breaks | construction | individual income tax

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