Morocco: Proposed VAT rate hike to 20% angers intermediaries
Source: Middle East Insurance Review | Dec 2017
The Moroccan government has proposed increasing the VAT rate to 20% next year from the current 14% on services provided by insurance intermediaries, a move which will increase costs in the sector by MAD210 million (US$22.3 million) a year.
Expressing anger, the Moroccan Union of Insurance Agents and Brokers (UMAC) has criticised the proposal set out in the draft Finance Act 2018 and has written to the Minister of Finance, Mr Mohamed Boussaid. Brokers warn that they will not sit idly by. Meetings are scheduled shortly with parliamentarians, including the Committee on Finance and Economic Development, announced the President of the UMAC, Mr Youssef Bounoual.
In a letter to the Minister, UMAC said that it is the only segment to be subject to VAT, calling the situation unfair. The higher VAT rate would aggravate the tax inequity faced by intermediaries, the letter said.
Mr Bounoual estimates that 5% of the annual turnover of insurance intermediaries, that would amount to about MAD210 million, would be a direct loss for the sector as a result of the increase in VAT. M
MAD1 = US$0.11