Interior Minister Abdelwahid Lafitte stated on Tuesday that “enhancing the effectiveness and efficiency of tax administration is a pressing necessity for the success of any tax reform.”
This statement was made during the Minister’s presentation of the draft law concerning local government taxes before members of the Interior Committee in the House of Representatives. He emphasized that the draft includes provisions related to the administration managing professional tax, residence tax, and local service taxes, based on the principle that “who issues also collects.”
The draft aims to “enact new regulations concerning certain assessment and collection rules related firstly to the taxes managed by state departments for the benefit of local authorities and secondly to the taxes managed by the revenue departments of these authorities.”
It also aims to “introduce amendments to some rules related to the taxes due for the benefit of local authorities, whether those managed by state departments or those managed by the tax departments of these authorities.”
The Minister stressed that “the reform of local government taxes is among the most important initiatives launched following the issuance of the regulatory laws regarding local authorities,” noting that “the state has taken upon itself to implement the directives regarding local government taxes.”
According to Lafitte, “based on an evaluation of the period from 2021 to the present, it has been proposed to assign the issuance and collection of residence tax and local service tax to the same administration managing the professional tax, represented by the departments under the tax administration. This will enable the utilization of the expertise accumulated by this administration in managing state taxes.”
The government official emphasized that “the draft law aims to make the tax administration the entity responsible for issuing and collecting the residence tax and local service tax in addition to the professional tax it currently manages, with the prospect of establishing a local regional tax administration.”
The draft includes “provisions concerning the assessment of the tax on undeveloped urban land by modifying the rates of this tax, and on the other hand, collecting taxes managed by the local government tax departments, including the mentioned tax, through the establishment of collective collectors within local authorities to carry out all procedures for collecting these taxes, especially the compulsory collection process.”
The draft proposes to “align the rates of the tax on undeveloped urban land with the level of infrastructure available in the areas where the taxable properties are located, which have remained unchanged since 2008.”
It suggests changing the aforementioned tax rates from 20 to 30 dirhams per square meter for lands located in fully equipped areas with all or most facilities, especially health centers, educational institutions, basic public utility networks such as roads, electricity, water, sanitation, public lighting, urban transport, and waste collection services.
Additionally, it proposes to increase the aforementioned tax from 10 to 15 dirhams per square meter for lands located in moderately equipped areas that at least have roads and networks for electricity and water.
Furthermore, the tax will be increased from half a dirham to two dirhams per square meter for lands in poorly equipped areas lacking all or most of the aforementioned public facilities and networks.
Lafitte believes that the new provisions will “contribute to ensuring the efficiency of the collection operations carried out by public accountants and work to reduce the outstanding amounts for the taxes managed by the local government tax departments.”
The Minister added that “the ministry’s departments will work to support local authorities to ensure the proper implementation of the provisions outlined in the draft law by preparing a directive to be sent to the governors of regions and the heads of provincial administrations and departments across the kingdom, as well as to the authorized signatories in local authorities.”
