Morocco Introduces Corporate Tax Break

Morocco will exempt new industrial companies from corporate tax for five years to stimulate investment, the finance and economy ministry said, Aawsat reported. The corporate tax holiday will benefit industrial firms that were created since the publication of the 2017 budget, the ministry said in a statement. The budget was published in June 2017. The measure aims to encourage investment in 24 sectors including the automotive, aeronautical, textile, manufacturing, food and pharmaceutical industries. One analyst said the tax incentive indicated the existing tax system was not doing enough to spur on industry and needed revision. “The decision shows that the Moroccan economy is unable in the current conditions and under the current tax system to promote industrial investments,” Rachid Aourrazz at the Moroccan Institute for Policy Analysis told Reuters. The tax holiday has been offered as Morocco forecasts a further drop in foreign direct investment in 2019, after it plunged 17.2% in five months to May 2018 compared to the same period last year. The kingdom has attracted investment from a number of big auto and aerospace investors in recent years including Renault, Peugeot, Bombardier, Boeing and Safran.