OECD recommends tax reforms for sustainable financing of health in Morocco

At a time when Morocco continues to rely on its health system to cope with the coronavirus pandemic, two OECD tax experts have proposed tax reforms to ensure sustainable financing for the health sector.

 

In countries around the world grappling with the current health and economic crisis, the urgency to mobilize domestic resources has increased in recent months. But if the crisis has “put pressure on public spending and tax revenue at the same time when the health sector needed additional financing”, the post-Covid-19 period could “cause particular difficulties for the financing of the fight against other health threats,” Celine Colin and Bert Brys said Monday.

The two tax economists at the Center for Fiscal Policy and Administration of the Organization for Economic Co-operation and Development (OECD) have thus delivered an analysis on how Morocco could ensure sustainable financing for the health sector.

 

In a report titled “Mobilizing Tax Revenues to Finance the Health System in Morocco”, which has been just launched by the OECD and the Global Fund to Fight AIDS, Tuberculosis and Malaria, the experts set out the health-related tax measures that will allow the North African Kingdom to drain more revenues to finance its healthcare system and address the ongoing health challenges.

The current global health crisis, generated by coronavirus outbreak, has put spending and tax revenues under severe pressure while at the same time requiring increased funding for the health sector.

According to the document, meeting the health targets of the Sustainable Development Goals (SDGs) will ultimately require an increase in public health spending financed through tax reforms.

The report presents detailed tax recommendations on how Morocco could improve the design of its tax system, with a focus on health taxes. This includes improving the design of health social security contributions, raising more tax revenues from products that are harmful for health, and increasingly relying on environmentally-related taxes to improve both environmental and health outcomes for the Moroccan population at large.

The report calls for greater and better designed taxes on goods that adversely affect health such as tobacco and sugar-sweetened beverages, stressing the need for environmental taxes and health social security contributions to enhance health financing system.