Taxation: A major, Transformative, and Successful Reform

What a long way has been travelled in five years with the major tax reform. The assessment of this crucial project, presented by the Director General of Taxes to members of the CGEM, bears witness to the quantum leap achieved in revenue mobilization.

With hindsight, the least that can be said is that the directions taken at the Skhirat Tax Conference in 2019—formalized in the 2021 framework law—have proven to be wise.

“Five years ago, the framework law set out an ambition: a thorough overhaul of our tax system. Today, that ambition has taken shape and has been translated into tangible results.

At the end of these five years, 2026 is emerging as a moment that confirms a course and validates the relevance of the choices made in tax matters and in the governance of public finances,” Younes Idrissi Kaitouni stated at the outset.

The figures speak for themselves: by the end of December 2025, tax revenues managed by the DGI reached 291 billion dirhams, representing a remarkable 74% increase compared with 2021. The share of these revenues in GDP strengthened by more than four points, rising from 20.3% to 24.6% over the same period.

According to the head of the tax authority, these aggregates are not merely a matter of budgetary performance; they reflect the commitment of the entire community, including the business fabric. “The role of the Moroccan enterprise is not limited to creating value. It irrigates the economy, structures territories, supports employment, and through its tax contribution, participates in building public policies,” he emphasized.

Corporate income tax (IS): Revenues double in 5 years

Corporate tax contributions have in fact surged over the past five years. According to DGI data, corporate income tax (IS) revenues more than doubled in five years: they rose from 47.7 billion in 2021 to 100.3 billion in 2025, an increase of 110% over the period.

“This is the first time we have crossed the 100‑billion‑dirham threshold in IS. It reflects both the vitality of economic activity and the gradual establishment of a clearer, more secure tax framework that is more favorable to productive investment,” he said with satisfaction.

Domestic VAT revenues are following the same trajectory. They reach 71 billion dirhams in 2035, up 58% in five years. An increase that, according to Idrissi Kaitouni, embodies “the modernization of collection and deduction mechanisms, ensuring both the smooth flow of transactions and the neutrality of this tax for businesses.”

And what about personal income tax (IR) revenues, which have risen by 47% over the last five years, surpassing 70 billion dirhams.

That said, the purpose of the reform is not measured solely by the amounts collected. Collecting more is not an end in itself. What matters is how that collection is used.

On this point, the tax reform is proving decisive: the State has been able not only to consolidate macroeconomic balances and reduce its deficits effectively, but also to free up the room needed to implement major public policies, such as the generational project of social protection or the scaling-up of public investment—particularly in infrastructure—where the amounts committed have reached record highs.

Budget: Tenfold capacity

“The tax revenues mobilized over the 2021–2025 period constituted a decisive lever to support national priorities,” the head of the DGI summed up. In this regard, he stressed that the tax reform made it possible to increase the State budget by more than 90 billion over five years, i.e., a 74% rise, with major implications for the government’s ability to act on its priority projects.

This made it possible, the head of the tax authority noted, to implement the wage increases stemming from the social dialogue, amounting to nearly 40 billion dirhams—an increase of 28%—reflecting a clear commitment to purchasing power and social stability.

Another telling example: the resources of local authorities were strengthened through an increase of more than 10 billion dirhams, corresponding to a 67% rise over five years.

Support for corporate cash flow has also benefited from this unprecedented momentum in tax revenues, which helped address the “butoir” issue that had been poisoning relations between the State and businesses. The trend in tax refunds and repayments is particularly telling.

Whereas in an initial phase they averaged no more than 7.3 billion dirhams annually, since 2022 they have reached an average of 21 billion dirhams, rising from 13.7 billion dirhams in 2021 to 25 billion dirhams in 2025.

According to Idrissi Kaitouni, “this substantial increase reflects a deliberate change of scale. It has made it possible to inject significant resources into companies’ cash flow. Beyond the figures, this momentum affirms a now controlled and efficient management of refunds and repayments.”

Thus, improving mechanisms for reimbursing VAT credits—thanks to smoother procedures and better-controlled timeframes—constitutes a determining factor for businesses.

Transformative taxation

The Director General of Taxes insisted on a key point: the increase in revenues is in no way the result of a heavier tax burden.

Rather, it is the outcome of a tax reform described as methodical and balanced, based on broadening the tax base, restoring fairness, and a determined fight against tax fraud and evasion.

These are its cardinal principles that guided the reform and that made it possible to build trust, offer businesses a predictable framework, and strengthen the State’s financial credibility.

Which leads Idrissi Kaitouni to say that “taxation is not merely an instrument for levying, but a strategic lever for transformation.” Thus, he concluded, “a modern tax system is taking shape—supportive, structuring, and resolutely future-oriented.” A tax system in the service of economic sovereignty, social cohesion, and sustainable development.

Withholding at source: First effects

The issue of withholding at source was at the heart of the discussions between business leaders and the head of the tax authority. The latter responded to executives’ concerns: “The gradual generalization of withholding at source should be seen as a tool to prevent fraud, not as a new tax,” he first recalled.

The effects of introducing this mechanism were not long in coming. Between 2023 and 2025, the contribution of the individuals concerned by withholding at source increased by 80%. Another telling indicator: IR on rental income rose from around 230 million to more than one billion—without resorting to audits.

Finally, the refund claims filed by service providers subject to withholding at source on VAT “can be counted on the fingers of one hand,” he indicated. The refund issue could nevertheless arise with the extension of the mechanism to private companies generating more than 200 million dirhams in turnover. “The administration will do what is necessary to ensure refunds,” he promised.