Solidarity tax stirs heated debate at Moroccan parliament

 

MPs from the opposition joined their voice to labor unions which lambasted the government for planning to impose a solidarity tax on the salaries of middle class employees.

During an examination of the draft budget law in the parliament, MPs deplored that the Middle Class continues to bear the brunt of government policies noting that this particular class has been weakened by rising expenses due to the weak quality of public services in education and health notably.

The government has proposed in its draft budget for 2021 a tax of 1.5% on monthly salaries higher than 10,000 dirhams.

Morocco’s public finances have been hit hard by the pandemic and the budget deficit is expected to surge to 7.5% this year before dropping to 6.5%.

In his answer to MPs, finance minister Mohamed Benchaaboun said the tax was necessary to reduce the deficit and implement social projects such as the mandatory health insurance.

He said that the measure shall apply only to 8% of Moroccan employees who have salaries higher than 10,000 dirhams and that the same solidarity tax applies only to 1% of businesses that have an annual turnover of more than 5 million dirhams.

Meanwhile, voices are rising for tax equity by imposing a tax on wealth instead of the solidarity tax.

Oxfam said that Morocco loses up to 2.45 billion dollars annually due to tax evasion.