Businesses will receive VAT refunds to help them recover from the crisis of recent years

El Gobierno marroquí ayudará a los negocios afectados por la pandemia

AFP/IAN FOSYTH - Aziz Akhannouch, Prime Minister of Morocco

The Moroccan government has announced an economic plan that aims to help those businesses that have been affected by the passage of the coronavirus and its various inconveniences. To this end, the government has pledged to pay 13 billion dirhams, which will compensate for the VAT tax that businesses have had to pay since the COVID-19 crisis. Experts expect this project to address the disadvantages businesses have faced after being affected by the restrictions and closures they have been involved in. It will also help to change industrial activity and the stagnation of citizens and workers, as the country has not experienced a financial crisis like this since 2009.  

Aziz Akhannouch, Morocco's prime minister, announced this action plan in parliament with the goal of promoting the social construction of the state. "Starting this year, the government is committed to clearing the accumulated VAT debt for private sector companies," he said during the session. This programme will be implemented in four months and will be completed by the end of the first quarter of 2022, he added. Small and medium-sized enterprises will also be encouraged to join this system in order to create more value added and in turn, promote employment. 

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The government also intends to implement and create all the necessary measures to be able to reactivate once and for all the public and private sectors in order to encourage investments and take advantage of all the opportunities and fiscal and non-tax incentives for their implementation.  

Last week, the executive also met with the General Confederation of Moroccan Enterprises to conclude an agreement in which the government would be responsible for sending Dh1 billion to accelerate the recovery of businesses by the end of this year. "The tax administration is committed to accelerating this dossier," said Khaled Zazou, director general of taxation. 

In order for companies to avail themselves of this aid, the law stipulates that they have to submit a permit and that after three months, they will receive their aid. The problem, according to Akhannouch, is that this has not been implemented for years and as a result, the state's debt to the private sector has increased to the amount of money that has been announced. In addition, it is worth noting that the previous executive was not able to solve the problem of VAT refunds, even having signed an agreement with the banks in 2018 for these funds to be on behalf of the state.  

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This new development model seeks to guarantee secure VAT neutrality for businesses, and in the words of the government, "the tax reform law considers it a priority". In turn, this will be considered a right for companies and means the solution to implement certain requirements with the aim of trying to reactivate this sector of the country, which is one of those that has suffered the most from the consequences of the coronavirus. In this project, the government has thought of five specific themes for its realisation: the immediate recovery of the economy, support for new businesses in promising sectors, activation of structural reforms, implementation of ambitious policies for the whole country in economic matters and support for women in the business sector. "We must create a competitive advantage by keeping up with the times and developing competitive and innovative companies, in order to defend the 'Made in Morocco' brand to support national production," said the president. 

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Since March 2020, the world has been engulfed in a virus-induced hecatomb, with all workers in the commercial and corporate sector, as well as their businesses, severely affected and constrained. In the Alawi country, for example, a special fund was created so that, when these sectors reopened, they would not have to face so many inconveniences. Many of them have even had to close, or reduce their workforce and even declare bankruptcy. The Central Bank of Morocco expects the economy to grow strongly and slowly by the end of this year, recovering from the impact of the epidemic after the recession in 2020