Morocco raises income tax exemption threshold
Starting January 1, 2027, 87% of employees will pay no income tax, with potential monthly gains of MAD 500.
Morocco's 2027 Finance Bill proposes increasing the annual income tax exemption threshold from MAD 40,000 to MAD 60,000. Economy and Finance Minister Fouzi Lekjaa stated last Friday that this change, effective January 1, 2027, will exempt 87% of employees from income tax. The reform is projected to cost the state MAD 5.5 billion, with most affected employees gaining around MAD 500 monthly.
The new tax rates will see income between MAD 60,001 and MAD 80,000 taxed at 10%, MAD 80,001 to MAD 100,000 at 20%, MAD 100,001 to MAD 180,000 at 34%, and income above MAD 180,000 at 37%. Professional expense deductions will rise to 45%. Researcher Oussama Boughda noted that while employees are the primary beneficiaries, the changes also apply to professional and real estate income.
The reform will be phased in until 2031, when top tax rates will be 30%. Boughda estimated monthly gains could range from less than MAD 100 to MAD 500, depending on individual circumstances and family status. For instance, an employee earning MAD 10,000 monthly could see their net salary increase from MAD 8,904 to MAD 9,346.
Why it mattersEmployees and individuals with professional or real estate income in Morocco will see changes in their tax liabilities and potential monthly earnings.