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Morocco Hosts ITD Conference On Tax Decentralization

by Lorys Charalambous,, Cyprus

09 December 2013

During his opening address at the Fifth International Tax Dialogue (ITD) Conference in Marrakech, Moroccan Finance Minister Mohamed Boussaid underlined the importance of fiscal decentralization.

Emphasizing that tax revenues constitute the main pillar for financing development, and underscoring the importance of good governance in tax matters, Finance Minister Boussaid stressed that there must be a good distribution of fiscal powers between the central and local tax administrations. A tax "partnership" between central and local authorities, and distribution of fiscal powers, will guarantee "harmonious and balanced" development at regional and national level, he insisted.

Alluding to the various reforms of the Moroccan tax system that have been implemented, Finance Minister Boussaid made clear that Morocco had opted for decentralization as a means of ensuring democratic governance. Here, the Finance Minister explained that local authorities in Morocco currently receive 30 percent of income from value-added tax (VAT), 1 percent of revenue derived from individual income tax, and a further 1 percent of income yielded from corporation tax, to provide them with the necessary financial resources.

Furthermore, Boussaid pointed out that the country's general tax administration has undergone significant restructuring over the last few years, noting that during this process fiscal powers have been bestowed on the regions, and services decentralized. Consequently, the central administration is now only responsible for planning, cooperation, and monitoring, he stated.

Commenting, OECD Assistant Secretary General Rintaro Tamaki underlined the importance of decentralizing fiscal competencies, to improve territorial development. Almost one-third of public spending is carried out at local level, and expenditure is therefore decentralized while tax collection is not, resulting in weak budgetary performance, Tamaki warned.

The International Tax Dialogue was initiated in April 2002 by the International Monetary Fund, the OECD, and the World Bank. The joint initiative is intended to encourage and facilitate discussion of tax matters among national tax officials, regional tax organizations, and international organizations.

TAGS: Morocco | Finance | tax | value added tax (VAT) | budget | corporation tax | individual income tax | services | Tax

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