Fall in tax revenue from local authorities at the end of May

According to figures recently published by the General Treasury of the Kingdom (TGR), the tax revenues of local authorities reached 13.3 billion dirhams (MMDH) for the first five months of 2023.

Compared to the same period of 2022, this corresponds to a decrease in tax revenue of 2.8%, the General Treasury said in its monthly bulletin of local finance statistics (BMSFL) last month.

According to the explanations provided by the TGR, this decline occurred “following the 0.4% reduction in direct taxes and 4.2% in indirect taxes”, stressing that tax receipts constituted 78.9% of overall revenue of local authorities at the end of this period.

Regarding the drop in direct taxes (-18 MDH), the TGR attributes it to “the 13.5% drop in the municipal services tax (-262 MDH) and 32.5% in the business tax (- 191 million dirhams), combined with the 29.2% increase in the share of the regions in income from corporation tax (IS) and income tax (IR) (+348 million dirhams) and 9 4% of the tax on undeveloped urban land (+95 MDH)”.

As for the drop in indirect taxes (-369 MDH), the General Treasury “explains it mainly by the 6.8% decrease in the share of local authorities in the product of value added tax (VAT) (- 526 MDH)”.

In detail, according to the TGR, the resources transferred increased by 4.2% to 10.8 billion dirhams at the end of May 2023 against 10.4 billion dirhams a year earlier.

This evolution “results from the increase of 29.2% in the share of the regions in the product of IS and IR (+348 MDH) and of 66.1% of subsidies (+652 MDH), combined to the 6.8% decrease in the share of local authorities in the VAT product (-526 MDH)”, indicated the TGR indicating that the revenues of local authorities are made up for 43.1% of their share in VAT proceeds.
For their part, the resources managed by the State on behalf of local authorities reached 2,252 MDH at the end of May 2023 against 2,713 MDH a year earlier.

This is a reduction of 17%, “coming from the reduction of 13.5% of the municipal services tax (-262 MDH), of 32.5% of the professional tax (-191 MDH) and 4.4% of the housing tax (-8 MDH)”, underlined the TG in its bulletin.

As for the resources managed by local authorities, they increased by 11.2% to reach 3,724 MDH at the end of May 2023 against 3,350 MDH recorded a year earlier.
As specified by the TGR, these resources consist largely of revenue from the tax on undeveloped urban land (1,105 MDH), the fee for temporary occupation of the communal public domain (499 MDH), state revenue (352 MDH) and tax on construction operations (312 MDH).

It should be noted that in the space of one year (between the end of May 2022 and the end of May 2023), the evolution of the structure of the resources of local authorities suggests “an increase in the share of transferred resources and the share resources managed by local authorities, combined with a decrease in resources managed by the State”.

By way of comparison, non-tax revenue reached 3.5 billion dirhams, corresponding to an increase of 26.2% compared to their level at the end of May 2022. This change results “mainly from the 66.1% increase in subsidies (+652 MDH) and 21.1% of the fee for temporary occupation of the municipal public domain (+87 MDH)”, indicated the TGR.

In addition, the ordinary revenue of local authorities amounted to 16.8 billion dirhams, up 2.1% compared to the end of May 2022, due to the increase in transferred revenue and revenue managed by local authorities, combined with the 17% drop in revenues managed by the State, as indicated above.

Alain Bouithy