Morocco cuts self-employed tax rate
The government proposes lowering the tax rate for self-employed workers from 30% to 20% while introducing measures to prevent employer abuse.
Morocco plans to reduce the tax rate for self-employed workers from 30% to 20% as part of its 2027 budget proposal. The House of Representatives Finance and Economic Development Committee approved the changes on Wednesday. The government aims to ease the tax burden on independent workers and prevent companies from misclassifying employees as self-employed to avoid higher employment taxes.
Economy and Finance Minister Fouzi Lekjaa stated that some employers hire workers as self-employed to bypass income tax rates that can reach 20% or 25%, paying only a 1% tax. The proposed amendments raise the annual turnover limit for services provided to the same client from MAD 80,000 to MAD 100,000. Earnings up to this new limit will be exempt from withholding tax at source. If turnover exceeds MAD 100,000, the withholding tax rate will drop to 20%.
These changes align the tax treatment of self-employed individuals with the broader income tax reform, which increased the annual income tax exemption threshold to MAD 60,000. Lekjaa emphasized the government's intention to preserve the benefits of self-employment while ensuring companies do not exploit the system to evade taxes. Morocco has approximately 430,000 businesses registered under the self-employed system.
Why it mattersSelf-employed workers earning over MAD 100,000 annually will see their withholding tax rate decrease to 20% under the proposed 2027 budget.