World PLFR-2020: What tax innovations to revive the economy?

PLFR-2020: What tax innovations to revive the economy?

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Hibapress / MAP

The Draft Budgetary Finance Law (PLFR) for the year 2020 provides for a battery of fiscal measures that go in the direction of reviving the national economy. In addition to supporting sectors hard hit by the health crisis, these measures aim, among other things, to encourage taxpayers to use mobile payment and to strengthen Morocco’s foreign currency reserves.

For Mohammed Réda Lahmini, Chartered Accountant – Statutory Auditor, the national and international context marked by the persistence of the health crisis linked to the Covid-19 pandemic and its impact on the economic situation, implies a review of priorities and postulates which were set during the adoption of the 2020 Finance Law.

The PLFR-2020 revolves around three main pillars, namely supporting the gradual recovery of economic activity, preserving employment and speeding up the implementation of administrative reforms. It provides for several tax measures, the main provisions of which are as follows:
• Spreading of the contributions paid by the entities to the Special Fund for the management of the Covid-19 pandemic and deductibility of the corresponding charges by amortizing them at a constant rate over 5 financial years as from financial year 2020.

• 50% reduction in registration fees applicable to the acquisition of immovable property intended for residential use. This measure applies to acts which will be drawn up during the period from the publication of the Amending Finance Law 2020 until December 31, 2020, when the acquisition price does not exceed 1 million dirhams.

• Extension of the terms of agreements relating to social housing construction programs by 6 months.

• Establishment of a 25% reduction on the taxable basis of turnover achieved by mobile payment by natural persons with professional income determined according to the simplified net profit or flat-rate profit regime. According to Mr. Lahmini, this measure consists in replacing this reduction for 5 years by excluding the aforementioned turnover from the taxable base of the IR and from the IR tax thresholds according to the aforementioned regimes and subjugation to VAT.

• Postponement of the deadlines for derogatory measures relating to the spontaneous regularization of the tax situation of taxpayers. This postponement concerns:

– The spontaneous regularization of the tax situation of taxpayers who subscribe a spontaneous amending declaration in matters of IS, IR, VAT, RAS, Stamp duty and taxes on insurance contracts until December 15, 2020;

– The regularization of the tax situation of taxpayers who have not filed their annual declaration of global income relating to property income, for previous years not prescribed until December 31, 2020.

– The spontaneous regularization of the tax situation of taxpayers relating to liquid assets, movable and immovable property, advances in current accounts of partners and loans granted to third parties. The PLFR 2020 has provided for the extension of the subscription and payment deadline to December 15, 2020.

– Extension of the deadline for subscription to the declaration and payment of the release contribution in respect of assets and cash held abroad until December 31, 2020 instead of October 31, 2020, initially set by the 2020 Finance Law.

– Institution of the same release contribution provided for by the 2020 Finance Law and fixed at 1.5% of the amount of the unpaid check (s) capped at 10,000 DH for individuals and 50,000 DH for legal persons, in respect of the related fines payment incidents whatever their ranks, not yet settled, for checks presented for payment between March 20, 2020 and June 30, 2020.

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