PLF 2024: the key recommendations of the CGEM

PLF 2024: the key recommendations of the CGEM

The recommendations of the General Confederation of Moroccan Enterprises (CGEM) for the 2024 Finance Law revolve mainly around the reform of the value added tax (VAT) and that of local taxation, said, Friday in Casablanca , the President of the Confederation, Chakib Alj.

Indeed, the recommendations of the CGEM for the Finance Law 2024, submitted at the beginning of July to the Ministry of Economy and Finance, reflect the concerns of companies of all sizes, underlined Mr. Alj during a press conference on economic return.

Several advances have been made in the first three quarters of 2023 in favor of the development of the entrepreneurial fabric, but these achievements achieved thanks to a solid and effective public-private partnership “are not enough”, he said. , calling for an acceleration in the weeks and months to come so that this fabric is more competitive and able to meet the challenges imposed by the complex and unpredictable global situation marked by unprecedented inflation.

With regard to social dialogue, Mr. Alj recalled the signing, in April 2022, of the tripartite agreement between the State, the unions and the CGEM, noting that a timetable has been established with deadlines for compliance commitments made by each of the social partners, including the two increases in the minimum wage, the promulgation of the law on strikes and the revision of the labor code which is more than 20 years old.

The development of quality jobs requires in particular the promulgation of the law on strikes and the updating of the labor code which must absolutely accompany the Investment Charter, he estimated, highlighting the importance of access to financing, access to public procurement and access to quality professional training meeting the needs of businesses.

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In addition, the president of the Federation pointed out that the CGEM has received several regulatory texts from the Ministry of Energy Transition and Sustainable Development that the federations concerned are studying, noting that the subject of the reduction the cost of energy and the acceleration of decarbonization are essential to the development of our industrial fabric.

And to continue that the CGEM constantly encourages and supports its members to reach the proportion of two-thirds of private investment by 2035 and create sustainable and quality employment, while putting climate issues and CSR at the forefront. center of its priorities.

For his part, the vice-president of the CGEM, Mehdi Tazi, stressed that the main pillars of economic recovery, particularly in terms of financing, concern the launch of the Investment Charter, the ongoing activation of the Mohammed Fund VI for Investment, endowed with an initial capital of 15 billion dirhams (MMDH), coming from the State budget, the implementation of the Tatwir R&D and innovation program, the adoption of the new Law on deadlines payment, the implementation of new programs dedicated to VSEs and entrepreneurship and to the promotion of employability.

On the social part, he added, the main levers are the labor code which is part of the measures accompanying the Investment Charter, as well as the projects included in the CGEM program, in particular those related to the energy and logistics, industry, the service sector, IT, and support for start-ups.

Here are the main proposals of the General Confederation of Moroccan Enterprises (CGEM) within the framework of the draft Finance Law 2024:

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Transversal measures:

Value Added Tax (VAT):

– Redefinition of the scope of application, of VAT exemptions and generalization of the right to deduction and reimbursement;- Reduction of the number of VAT rates to reach 2 rates, while maintaining the rate of 0%;- Review of the tax base of VAT, in particular to exclude specific taxes from the calculation of the base; – Adjustment of the Temporary Admissions system;

Taxes locales :

– Reduction in the number of taxes by grouping them into two main taxes, a property tax and a tax on economic activity;- Simplification of the calculation of business tax, generating inequity between owner-operators and tenants;

Income tax (IR)/ Corporation tax (IS):

– Consider reducing the income tax scale over a period of 3 years with a marginal target rate of 30% in 2026; – Extend the ceiling for exemption from severance pay to 3 million dirhams (MDH) from 50 years;- Increase the face value of the meal voucher to 60 dirhams;- Exclude non-current products from the calculation of the taxable base for IS;- Extend the mechanism for capping the IS at 20% to all companies committing to make an investment equal to or greater than 1.5 billion dirhams (MMDH) over 5 years; – Improve the neutrality mechanisms for group restructuring operations; – Review the conditions for the deductibility of provisions for bad debts and in particular the requirement of legal recourse;

Customs reforms:

Continue to reduce the minimum contribution with a view to its abolition; – Review the taxation of demurrage, expressly excluding them from the application of the 10% RAS; – Review the policy for the recovery of public debts: Notice to Third Party Holder ( RTD); – Review the tax penalty system; – Rationalize the taxation of import inputs; – Review the mechanism for calculating the TIC on polluting products; – Revise the methods of application of customs duties on ” royalties and license fees” (royalties);

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Targeted measures:

Development of start-ups – Establish a definition of start-up;- Give non-resident companies the possibility of benefiting from the tax deferment regime (article 161 CGI);- Allow the recovery of VAT on management fees for investment funds; – Set up incentive schemes via stock options for employees;

Circular economy and energy transition:

– Recovery of waste, particularly in the plastics and metallurgy sectors via the application of VAT on the sole margin of products from the green sector;- Reduction of customs duties for electricity storage batteries to 2 .5%;

Architectural heritage and urban real estate:

Definition of the activity of property merchants; – Establishment of an adapted tax regime – Application of VAT on margin only – Consecration of the uniqueness of the purchase-sale transaction following transformation within 5 years in terms of Recording rights

Tourism sector:

Generalization of the 10% VAT rate to the tourism industry, including ancillary revenue from tourist accommodation establishments;- Abolish the VAT on the Tourist Promotion Tax (TPT) and the Tourist Tax (TS);- Create a tax framework adapted for furnished rentals by individuals.

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