Tax Refunds, Rebates, and Restitutions in Morocco: Between a Rise and a Glimmer of Hope

Tax refunds, rebates, and restitutions rose slightly at the end of July 2023, according to figures from the Kingdom’s General Treasury (TGR) in Morocco. This encouraging, albeit modest, trend is a relief for economic players and helps to restore their confidence in these times of crisis.

At the end of July 2023, tax refunds, rebates, and restitutions totaled 5.950 billion dirhams (MMDH), up 1% on the same period the previous year. To better understand this trend, it is important to place these figures in context. Tax refunds, rebates, and restitutions had fallen sharply by 44.3% by the end of January 2023, to just 153 million dirhams (MDH).

Two months later, at the end of March 2023, they stood at 3.233 MMDH, down 10.4% on the same period in 2022. At the end of May 2023, a slight decline of 3.6% was observed compared with the same period in 2022, with an amount of 4.598 MMDH, to reach 5.601 MMDH at the end of June 2023, up 0.5% compared with the end of June 2022. These fluctuations reflect variations in the implementation of the Finance Act and measures taken to support the economy in times of crisis.

The increase in tax refunds, rebates, and restitutions to end-July 2023 indicates a degree of stabilization and a willingness on the part of the authorities to respond to the needs of taxpayers and businesses. In a difficult economic climate, this slight increase in tax refunds, rebates, and restitutions is encouraging. It is helping to ease the financial burden on economic players and restore their confidence.

It has to be said that this upward trend is a ray of hope in a difficult economic climate. This encouraging trend testifies to the efforts made to support taxpayers and businesses while underlining the importance of maintaining rigorous management of public finances.

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Higher refunds than the previous year!

An examination of customs revenues reveals a significant increase in tax refunds, rebates, and restitutions compared with the previous year. In detail, revenue from customs duties rose by 4%, but revenue from import VAT fell by 4.9% and domestic consumption tax on energy products (TIC) fell by 4.1%.

These decreases can be explained in part by higher tax refunds, rebates, and restitutions than in 2022. Net domestic tax revenues rose by 7%, mainly due to tax refunds, rebates, and restitutions borne by the General Budget.

By contrast, net customs revenues fell by 3.3%, mainly due to higher tax refunds, rebates and restitutions. This analysis highlights the complexity of tax mechanisms and their impact on government revenues.

Tax refunds, rebates and restitutions play a crucial role in managing public finances and supporting taxpayers and businesses. The increase observed to the end of July 2023 indicates the authorities’ determination to meet economic needs.

Other highlights from the TGR figures

Non-tax revenues rose by a significant 33.2%, mainly as a result of payments from special Treasury accounts to the General Budget, monopoly revenues, and assistance funds. Expenditure rose by 5.4% year-on-year.

Expenditure on goods and services rose due to personnel costs and other expenditure on goods and services. Interest charges on debt also rose, while compensation expenditure fell.

Capital expenditure rose by 13.7%, mainly due to spending by ministries and common charges. In terms of Treasury balances, there was a positive ordinary balance, marking an improvement on the same period the previous year.

However, the Treasury’s deficit widened, offset by a positive balance generated by the Treasury’s special accounts and autonomously managed government departments.

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(Featured image by Nataliya Vaitkevich via Pexels)

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First published in LES ECO.ma. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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