Morocco’s Budget Deficit Reached $4.7 Billion at End of August

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Morocco’s Budget Deficit Reached $4.7 Billion at End of August

Rabat – The General Treasury of Morocco (TGR) has revealed that the country’s budget deficit reached MAD 43.5 billion ($4.7 billion) at the end of August.

The figure represents a decrease compared to August of the last year, when Morocco recorded a budget deficit of MAD 33.8 billion ($3.6 billion).

TGR announced the deficit in its monthly bulletin detailing public finance statistics for the month of August.

The bulletin also reported a positive balance of MAD 3.6 billion ($392.7 million) generated by the special treasury accounts and government services managed autonomously. In contrast, August 2019 saw a positive balance of MAD 5.6 billion ($611 million).

Charges

TGR described four major charges that characterized Morocco’s budget deficit in August.

Net customs revenue declined by 12.5% in net customs revenue due to tax refunds of MAD 67 million ($7.3 million) in August 2020, compared to MAD 49 million ($5.3 million) in August 2019.

Tax refunds include tariffs, which declined by 5.3% since August 2019, import value-added tax (-12.2%), and domestic consumption tax (-17.5%).

In addition to customs revenue, the bulletin showed a decline of 6.2% in the domestic consumption tax of manufactured tobacco.

For net domestic tax revenue, TGR recorded a decrease of 5.3%, taking into account reimbursements, tax reductions, and refunds.

Corporation tax recorded a deficit of 0.6%, due to refunds of MAD 366 million ($39 million) against MAD 217 million ($23 million) in August 2019.

Income tax recorded a deficit of 6.4% due to restitutions of MAD 68 million ($7.4 million) against MAD 55 million ($6.0 million) the year prior.

In addition, Morocco’s Directorate of Personnel Expenses (DDP), an affiliate of TGR, revealed that resources of the income tax decreased by 2.4%.

Social solidarity contribution in August 2020 increased by 5.6% from August 2019.

Domestic value-added tax (VAT) also recorded an increase of 2.7%. TGR noted that at the end of December 2019, VAT refund arrears were MAD 41.2 billion ($4.4 billion).

Meanwhile, net domestic tax revenue, including registration and stamp duties, decreased by 21.3%.

Expenses

TGR also described four major expenses that marked Morocco’s budget deficit at the end of August. 

The expenses include an overall expenditure implementation rate of 60% and an issuance rate on implementations of 86%. In August 2019, the same rates stood at 61% and 83%, respectively.

In addition, ordinary expenses increased by 2.3%, due to a 7.9% increase in expenditure on goods and services.

Regarding investment expenses, the bulletin noted a rise of 9.8% at the end of August 2020, amounting to MAD 40.6 billion ($4.4 billion). In August 2019, investment expenses reached MAD 44.6 billion ($4.8 billion).

The increase is due to a 36.5% rise in expenses in common charges and an 8.9% drop in ministries expenses.

Source: moroccoworldnews.com