Morocco exempts military industry operators from corporate tax

In a latest measure to spur the defense industry, the Moroccan government adopted a decree exempting investors from corporate tax.

The tax break will benefit manufacturers of defense equipment, weapons, and ammunition, the spokesman for the government said following a cabinet meeting.

In June, the government approved a bill to set up two industrial acceleration zones dedicated to the defense industry, as the country seeks to reduce its dependence on imports.

Morocco has also adopted a law to spur the defense industry which requires that the majority of the capital be held by Moroccan investors.

The defense industry enjoys high priority in Morocco’s investment charter which offers incentives and state aid, while requiring technology transfer.

The Moroccan government increased the budget allocated for defense to 133 billion dirhams ($13.5 bln) as it prepares to promote defense industries and upgrade equipment, as shown in the draft budget for 2025.

From a balance of power perspective, Morocco is forced to make sure it has the latest technology to stay at pace and ensure it has efficient deterrence capabilities amid a surge in war rhetoric among Algerian officials.