Rabat – Morocco’s tax administration has made notable strides in recent years, but significant hurdles remain, according to a new evaluation conducted by the International Monetary Fund (IMF).
This review, conducted from September 30 to October 13, the second since 2018, examines the performance of the General Directorate of Taxes (DGI) and identifies priority areas for reform.
Morocco collected last year approximately MAD 343.7 billion ($33.7 billion), representing 21.5% of GDP, despite a slowdown in economic growth to 3.2%.
Value-added tax (VAT) continued to be the largest revenue source, accounting for 37% of total collections, followed by corporate tax at 22% and personal income tax at 18%.
Among the 32 performance indicators reviewed, 18 showed improvement compared with 2018, signaling progress, though challenges persist.
The DGI has implemented a series of reforms aimed at modernizing operations and aligning them with international standards. Efforts include more structured field inspections and cross-referencing with other government agencies to identify unregistered taxpayers and expand the tax base.
A major development has been the launch of the online tax services portal, SIMPL, which mandates electronic filing for all taxpayers. The system now processes over 90% of tax declarations and payments digitally.
Risk management has also been strengthened through the Data Reconciliation and Analysis System (SRAD), which leverages big data and advanced analytics to identify high-risk taxpayers and focus audits where they are most needed.
The DGI has further rolled out a risk-based audit program and implemented initiatives to encourage voluntary compliance.
Taxpayers can access services around the clock through the portal, the “Daribati” mobile app, and a call center.
Areas of concern
Despite these improvements, the evaluation identifies several pressing weaknesses. The taxpayer registry remains partially unreliable, particularly for inactive taxpayers, whose records are not always deactivated on time.
Under Article 228 bis of the General Tax Code, a taxpayer is considered inactive if no declarations or payments have been made in the last three fiscal years and no activity has occurred during that period.
The DGI is developing a system to automatically update inactive accounts.
Timely filing rates remain below international norms. In 2024, only 57.3% of corporate tax returns were submitted on time across all taxpayers, compared with 93.3% for large companies, falling short of the 75% benchmark.
Personal income tax and VAT saw timely filing rates of 62.2% and 64.7%, respectively, while withholding tax filings stood at 56.8%.
Tax arrears also remain high. At the end of 2024, outstanding taxes averaged 58.8% of base tax revenues collected over the previous three years, with long-term arrears (over 12 months) representing 67% of the total.
Tax dispute resolution also faces challenges. While the General Tax Code allows both administrative and judicial phases, most cases are settled informally.
About 90% of disputes are resolved amicably before formal decisions, and only a small number enter formal litigation. Even though 90.5% of claims are resolved within 90 days, this falls short of international best practices.
The IMF’s assessment provides a roadmap for the DGI’s 2024-2028 strategic plan and annual implementation programs, encouraging the adoption of modern administrative techniques and setting measurable benchmarks.
