The government wants to overtax the oligopolistic sectors, oil, banks, cement, insurance…

Several sources within the Parliament’s Finance Committee have confirmed the information to us. It was announced by Fouzi Lekjaa this week before the deputies of the commission. The Minister Delegate for Finance has announced that his department will include a proposal in the 2023 finance bill, aimed at overtax sectors that make big profits and take advantage of an oligopolistic situation.

The form of this tax has not been disclosed, according to our sources. But according to an opposition member, who welcomes this news, this additional tax on profits will apply to sectors such as hydrocarbons, cement works, banks or even insurance… In short, any sector which, in fact, is totally closed to competition because of the many barriers to entry for any new entrant wishing to enter it.

The proceeds of this surcharge will not be diluted in the general revenues of the State for ordinary expenses, but will be used, as reported by our sources, to finance social reforms and provide support to populationswhose purchasing power has taken a serious hit with the inflationary tensions of this year 2022.

The Minister Delegate for Finance made it clear to the deputies that this provision was validated by the head of government himself, just to give it a firm and official character.

This type of mechanism for financing the State’s social effort is not new, especially in times of crisis or budgetary “slump”. A solidarity tax is already applied to companies currently, as decided in the 2022 finance law, the first budget of the Akhannouch government. It applies to all companies that make a net profit of more than 1 million dirhams, according to the following scale:

– 1.5% for companies that make a net profit between 1 million and 5 million dirhams;

– 2.5% for companies that make a net profit between 5 million and 10 million dirhams;

– 3.5% for companies that make a net profit between 10 million and 40 million dirhams;

– 5% for companies that make a net profit of more than 40 million dirhams.

Another thing to know: banks, the Caisse de depot et de gestion (CDG), Bank Al-Maghrib and insurance and reinsurance companies already pay more corporate tax than other non-financial companies, for a rate of 37% against a rate of 31% applied to companies which record a net result of more than 1 million dirhams.

A direct response to popular discontent

This 37% tax applied to the financial sector will perhaps not be raised, but new sectors will probably come to align themselves with this rate, such as the hydrocarbons or cement sector. An old claim of several political parties which has never been accepted by the governments of the past ten years, including the executive El Othmani.

The Istiqlal and the PAM, then in the ranks of the opposition, proposed with each finance bill a special tax on oligopolistic sectors to align their CIT rate with that paid by banks and insurance companies. But the finance ministers of the El Othmani team, all RNIists, rejected these draft amendments each year, which were also carried by the FGD, the PPS (from 2019) and the trade union groups of the second chamber.

What has changed between yesterday and today for the RNI, which now leads the government, to opt for this choice, which it described not even a few years ago as “populist”? The political context. This announcement comes indeed in an atmosphere of rebellion against the government which, according to public opinion, has done nothing concrete to cushion the effects of inflation on purchasing power. Public opinion even accuses the government of letting certain large companies (in the oil sector in this case) enrich themselves on the backs of citizens.

This additional tax on oligopolistic sectors thus sounds like a response to this situation.

Fouzi Lekjaa also sent the same signal a week ago, during a study day in Parliament on income tax, announcing the main lines of the changes that will be made in 2023. These last s are already part of the reduction in the tax burden on low and medium wages and the overtaxation of high incomes.

The main lines of the 2023 tax measures on corporate income tax and income tax are thus beginning to take shape: tax cuts on low-income populations and the middle classes, overtaxation of high incomes and oligopolistic companies, etc. Objective: to generate new pockets of purchasing power for households by taking a little from the “rich”.

Or how popular discontent pushed the government to “Pikettize” itself, despite itself!

Income tax: the government intends to lower the pressure on the middle classes

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