Casablanca – Local authorities in Morocco have seen a significant rise in their tax revenues, reaching $3.01 billion by the end of August 2024, reflecting a 14.8% increase compared to the previous year, according to the General Treasury of the Kingdom (TGR). This growth is attributed to increases in both direct and indirect taxes, contributing to a steady boost in public finances.

The latest data from the TGR indicates that direct taxes have grown by 10.6%, while indirect taxes surged by 18.5%. These tax revenues account for 84.9% of the total income of local authorities, highlighting their critical role in public budgets.

In addition to tax revenue, transferred resources amounted to $2.03 billion by the end of August 2024, up from $1.92 billion a year earlier, marking a 5.8% rise. This increase can be attributed to a 17.6% rise in local authorities’ share of value-added tax (VAT), adding approximately $211 million. The share of taxes from insurance contracts also saw a boost of around $24 million. However, the data also reveals a 39% decrease in government subsidies, reducing this source of income by about $95 million, and a 7.6% drop in the regions’ share of corporate and income tax revenue, amounting to a reduction of approximately $29 million.

In terms of structure, the share of VAT accounts for 39.9% of the total income of local authorities.

Further supporting local authority finances, resources managed by the Moroccan state on behalf of local authorities saw a notable 19.3% increase, reaching $824 million by the end of August 2024, compared to $691 million a year earlier. This rise was driven by a 30.6% increase in communal service taxes, alongside a 6.4% growth in professional tax and a 22.2% increase in housing tax.

Resources directly managed by local authorities themselves also showed growth, reaching $679 million by the end of August 2024, a 7.8% increase from the previous year’s $630 million. These funds come primarily from taxes on undeveloped urban land ($171 million), temporary public domain occupation fees ($78 million), construction operation taxes ($60 million), public property revenues ($53 million), and wholesale market agent fees for fruits and vegetables ($46 million).

Overall, the structure of local authority resources has shifted slightly between August 2023 and August 2024, showing a decrease in the share of resources managed directly by local authorities and transferred resources, but an increase in those managed by the state. This evolving financial landscape reflects ongoing adjustments in how local and national governments manage public funds in Morocco.