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Many questions have arisen since the passage of the Finance Bill 2024, which brings changes to VAT rates on water and electricity bills.
The fact that Lydec, the delegated manager responsible for water and electricity distribution in Casablanca, has just issued a press release detailing these changes allows consumers to get a more accurate idea of what is happening will change in your invoices.
Al Ahdath Al Maghribia conveyed on Tuesday, January 16, 2024 the key points covered in this press release from Lydec.
The delegated manager of Casablanca informs its customers that the VAT changes in this regard will occur gradually until January 2026.
Thus, the sale of running water for domestic use, as well as the sanitary services carried out by this appointed manager and the rental of meters, are now exempt from VAT.
Until now, these operations were taxed at 7%, but the VAT on electricity will increase from 14% to 16% from this month of January 2024.
In January 2025 and January 2026, two points will be added, increasing the rate of this VAT to 20%.
Regarding the non-domestic use of running water distribution, Al Ahdath Al Maghribia explains that for Lydec, the VAT on water distribution, sanitation and meter rental will increase from 7% to 10%.
As for electricity distribution, VAT will increase to 16% from January this year and will be gradually increased over two years, reaching 18% from January 2025 and 20% in January 2026.
According to the daily, while adopting these changes in the Finance Act for the current fiscal year, the government assured that they would not affect the purchasing power of households in any way.
In Parliament, Fouzi Lekjaa, the minister in charge of the budget, was questioned on this issue by MPs in the chamber and explained that the changes to electricity bills will only cost 2 dirhams per month, while the amount of bills for two-thirds of consumers will be the first consumption range will not be exceeded and will therefore be significantly less affected by the announced increases.
Fouzi Lekjaa also told MPs, reports Al Ahdath Al Maghribia, that the consumers affected by these gradual increases in VAT on electricity bills are mainly customers whose monthly consumption exceeds 500 kilowatts.
These customers result in a deficit for the state each year of around 7 billion dirhams, or the equivalent of the amounts it pays annually to the National Office of Water and Electricity (ONEE).
It is precisely this customer group that is affected by the rising electricity bills and not the consumption of households in Morocco.
By Fayza Senhaji
January 15, 2024 at 6:18 p.m
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