The Moroccan Union of Insurance Agents and Brokers (UMAC) has sent a letter to the Ministry of Economy and Finance to continue to lobby for consideration of the requirements of the draft Budget 2020 announced on 21 October, which did not include exemption from VAT on services provided by insurance agents and brokers.
UMAC noted that the exemption was not granted despite the holding of several meetings by insurance brokers and agents with various parliamentary groups and government agencies as well as correspondence sent to the Prime Minister, the Ministry of Economy and Finance and the General Directorate of Taxation, according to a report on the news and information site Menara.
The trade association says that services provided by intermediaries should not be subject to VAT because they do not benefit from tax neutrality, which is a technical pillar of VAT. In addition, the status of the end-user subject to VAT does not apply to insurance brokers.
Insurance brokers and agents have been lobbying for some time for the government to adopt measures in favour of the sector. According to the National Federation of Insurance Agents and Brokers (FNACAM), there are around 2,140 firms in the intermediary sector which contributes to the employment of more than 20,000 people directly.
Government spokesman Hassan Ababia said the 2020 appropriation Bill is based on four priorities. These are:
the implementation of the legal framework for the reform of educational and training systems, as a way of reducing social disparities and ensuring equal opportunities;
setting up social protection mechanisms, notably through the extension of medical coverage and health insurance;
speeding up regionalisation to address territorial disparities through strengthening regional resources and implementing administrative decentralisation.
injecting new dynamics into investments and supporting businesses, to create and promote financial support funds for very small to medium-sized businesses.