PLF 2023, State expenditure, IR, IS, auto-entrepreneur ... The OTRAGO report

The Government Labor Observatory (OTRAGO) presented a Report on the 2022 Finance Law recently adopted by Parliament.

This report aims to provide a complete follow-up of the different stages of the vote on the 2023 finance law, and of all the interactions and discussions that characterized it, emanating from both majority and opposition groups, on the based on an objective approach, resulting from the impartial presentation of the various positions and opinions. It also reports observations that respect democratic logic, meet transparency standards, or the compatibility of the financial offer submitted by the government with its commitments and its government program.

Thus, the OTRAGO report recalls that the finance bill presented by the government of Akhannouch is based on four essential axes, namely the consolidation of the pillars of the social State, the revitalization of the national economy by supporting investment, the consecration of spatial justice as well as the restoration of financial margins in order to ensure the sustainability of the reforms.

Having received the approval of 102 deputies in the House of Representatives, the economic objectives of the 2023 finance law are to achieve a growth rate of 4%, inflation at 2%, and a budget deficit at 4.5%. , underlines the report, while the economic hypotheses count on an agricultural harvest of cereals estimated at 75 million quintals, an average price of butane gas at 800 US dollars per ton, and an increase in external demand (excluding phosphate and its derivatives ) by 2.5%

The OLF 2023 also confirmed an increase in total expenditure of 15.42% compared to the year 2022, going from 52,248,526,600 dirhams in 2022 to 600,472,763,000 DH in 2023, in addition to an increase in total resources of 16, 32%. compared to 2022, going from 461,191,336,000 DH in 2022 to 536,435,316,000 DH in 2023, reports OTRAGO.

Breakdown of planned State expenditure and resources

In the PLF 2023 adopted by the two chambers, the general state budget amounts to 408,133,429,000 dirhams (excluding amortization of medium and long-term public debt), including 2,299,703,000 dirhams for public services. independently managed State (SEGMA), 111,786,619,000 DH for special Treasury accounts (CST), 78,253,012,000 DH for the amortization of medium and long-term public debt.

As for the resources provided for in the 2023 finance law, it amounts to 294,719,508,000 billion dirhams, including 2,299,703,000 DH for the State services managed independently, 110,374,805,000 DH for the accounts specials from the Treasury and 129,041,300,000 DH for medium and long-term loan receipts, indicates OTRAGO.

In addition, the report points out that the 2023 finance bill has allocated an amount of 300 billion dirhams (MMDH) to public investment, noting that this is the highest budget allocated to investment in the history of Morocco, and aiming to promote the advancement of the bases for the revival of the national economy, and the strengthening of the social orientations of the State, by allocating 2.5 billion dirhams to support the creation of 250,000 direct jobs, and the creation of 48,212 jobs within the framework of the public service and public establishments, and the launch of the Forsa program aimed at financing youth projects with financial coverage of approximately 1.25 billion dirhams, to which are added 9.5 MMDH to continue the second phase of generalization of compulsory health insurance, 71 MMDH for the education sector and 28.1 MMDH for the health sector.

The 2023 finance bill, supports OTRAGO, has also devoted more to the regional dimension, by pushing the regions to contribute to various development projects by allocating 10 billion dirhams to activate regionalization projects, in addition to 300 billion dirhams to put put in place the official character of Amazigh, 10.6 billion dirhams to deal with the problem of water scarcity, 26 billion dirhams for the compensation fund and 3.3 billion dirhams to support investment.

What the majority and the opposition think

In accordance with article 213 of the internal law of the House of Representatives, the finance and economic development committee proceeded to the general discussion of the provisions of the draft finance law 20223 on October 26, 2022 expressing its opinion on this draft.

According to the OTRAGO report, majority government groups expressed satisfaction with the project’s orientations aimed at improving and advancing the business climate, encouraging national production, intensifying social programs aimed at fostering inclusion and to fight against vulnerability, to continue the royal projects linked to the generalization of medical coverage, as well as programs aimed at job creation.

Furthermore, and still according to the report, the opposition groups have expressed their apprehension about the economic weight of the PLF 2023, the absence of ambitious measures to improve the quality of the national economy, and the fact that the project is based on fragile and unrealistic economic assumptions, as well as the lack of vision to reform a group of important sectors, including the pension fund and the compensation fund.

Opposition groups also raised the incompatibility of the project requirements with the social orientation of the state announced by the government, and the incompatibility of the new tax procedures with the principles of tax justice, and the disallowance by the government of a number of its obligations contained in its government statement.

In interaction with the discussions on the PLF 2023, the government, in the persons of Nadia Fattah Alaoui, Minister of Economy and Finance, and Fouzi Lakjaa, Minister Delegate in charge of the budget, presented its details on the orientations of the PLF, where the two ministers underlined the coherence of the project with the royal directives and the commitments registered in the government program, through a clear and digitized vision, resulting from a field diagnosis of the expectations of the citizens.

Having received some 209 amendments, the process of adopting the amendments saw the withdrawal of the government majority groups from 6 amendment proposals, the withdrawal of the socialist group from 18 amendment proposals and the rest of the opposition groups 14 proposed amendments, while the United Socialist Party (PSU) withdrew 4 proposed amendments.

The 2022 Finance Bill was therefore approved, during the meeting of the Finance and Economic Development Committee, with the approval of 25 deputies, men and women, the opposition of 10 deputies, with the acceptance of 10 amendments to the government, 28 amendments to the majority groups and 5 amendments to the opposition groups.

OTRAGO observations

With regard to the tax provisions arrived at in the PLF 2023, OTRAGO considered in its report that their application is inequitable with the orientations of the unification of corporate tax, which is enshrined in the framework law of tax reform, while the government is moving towards a gradual increase by 2025 of the tax rate for small and medium-sized enterprises (whose turnover is less than 300,000 dirhams) to 20% instead of 10 %, while it will work to reduce the tax on companies whose turnover is between 1 million dirhams and less than 100 million dirhams, from 31% to 20%.

The report also notes the government’s incomprehensible tendency to approve ” tax gifts for large companies by reducing the tax rate on profits by a third, since it will drop from 15% to 10%.

Also, OTRAGO notes in its report the incomprehensible tendency of the government to reduce the minimum tax contribution by 0.25%, which constituted a tax gift that even exceeds what was presented by the General Confederation of Moroccan Enterprises ( CGEM), which demanded a reduction of this tax to 0.5%.

It is also about the » government’s unjustified disregard for implementing the Competition Council’s recommendation to impose a tax on oil company profits, despite the Council’s clear acknowledgment of its companies’ exorbitant profits in light of the crisis that crosses the country “.

The report also underlines the confusion noted by the government about the income tax (IR), applied to the liberal professions, and its choice to rely on deductions at source, and the large gap between the rates imposed and the changes that affected the bill, after the agreement that the government reached with a number of organizations, including lawyers.

The government’s incomprehensible reliance on calculating the tax on the number of transactions instead of profits, was also raised by the report, noting the threat this poses to the finances of businesses and individuals, before noting the government’s refusal to reform the value added tax (VAT) and maintain its rate at 20%, which poses several problems for a certain number of liberal professions, the most important of which are veterinarians, who work in an economic sector which is exempt from taxes (agricultural sector).

And finally, OTRAGO notes the government’s orientation towards punitive measures against auto-entrepreneurs, by adopting a tax rate of 30% instead of the current 1%, with regard to transactions with the same customer whose value is 80,000 dirhams, noting that several holders of the self-employed card who work with a single customer (deliverymen, craftsmen, etc.), which may lead to the disappearance of this essential measure to reduce informal work before returning to the weakness of the procedures related to the reduction of the tax burden on employees and people with an income.

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