The Minister of Economy and Finance, Mr. Mohamed BENCHAABOUN, presented the Finance Bill 2019 before the Parliament : 22/10/2018

The Minister of Economy and Finance, Mr. Mohamed BENCHAABOUN, presented the Finance Bill 2019 before the Parliament

Mr. Mohamed BENCHAABOUN, Minister of Economy and Finance, stressed during his presentation before both Houses of Parliament, Monday October 22nd 2018, addressing social and inclusive issues of the Finance Bill 2019.

The Government is projecting a growth rate of 3,2 % in 2019 and to keep inflation at less than 2%, stated Mr. Mohamed BENCHAABOUN.

The Minister stressed also that the executive will ensure the stability of financial balances by maintaining the deficit at 3,3%.

« These are a range of indicators that reflect the strength of the national economy and which needs to be further reinforced by restoring the citizen's confidence through providing high quality social services, a decent job and a regular and adequate income », he affirmed during this meeting.

He added that the Bill is particularly interested in the promotion of private investment, supporting businesses, namely SMEs to encourage them to hire young people.

In fact, Mr. BENCHAABOUN stressed that the Government will further pro-active efforts to support public investment by allocating a total of 195 billion DH to pursue sector-based strategies and mega- projects of infrastructures.

In the same vein, he went on to say that the focus will be to the industrial acceleration programme, the consolidation of achievements in terms of job creation and attracting foreign investments as well as strengthening the positioning of national businesses on the global value chains.

The Government will also proceed to strengthening the achievements in the agricultural field within the framework of the Morocco Green Plan and further create employment opportunities and income-generating activities, namely for young people from rural communities. He noted that these steps require investors access to agricultural land, the mobilisation of the soulaliyates lands and the required financial and technical support.

At the same time, the Minister stated, the government projects to adopt a series of measures to boost private investment through speeding up legislative, organizational and institutional reforms to improve the business climate and accelerate the adoption of the new Investment Charter through the adoption of a new comprehensive, uniform and incentive contractual system.

He also stressed the Government's commitment to accelerate the reform of the Regional Investment Centers (RICs) in order to supply them with the required contributions to best accomplish their regional investment promotion and the creation of job opportunities.

Similarly, Mr. BENCHAABOUN added, the government is particularly concerned about supporting businesses, especially SMEs and very small businesses, through a range of steps that would be key to boost business confidence.

This includes the final settlement of the accumulated VAT debt in recent years for private sector businesses and public enterprises, given that the overall amount of this debt is 40 billion DH.

It will also be necessary to revise downward payment terms by the State, local authorities, institutions and public enterprises, their royalties to businesses through adequate devices for a rigorous monitoring of these deadlines.

The Minister also mentioned the improvement of the conditions for access to financing for SMEs and micro-enterprises by simplifying guarantee procedures and increasing funding for microcredit associations.

In addition to these initiatives, the Minister raised the issue of the review of corporate tax levels in order to adapt them to the needs of SMEs, notably through the reduction of the value of corporation tax from 20% to 17.5%.

In this context, he noted that a particular attention is paid to the implementation of the strategic vision of HM King Mohammed VI towards the consolidation of the international presence of the Kingdom and its position as a regional actor, besides the diversification of its partners, particularly in Africa.

On this basis, Mr. BENCHAABOUN emphasized the need to restore confidence to investors and economic operators, especially that tax incentives, the mobilization of land and the improvement of business climate remain insufficient without a real implementation of the opportunities provided by the Kingdom, including political and social stability and the promising prospects of the new Development Model.

On the other hand, he noted that constraints particularly related to the rise in oil and gas prices and urgent social projects will have a direct impact on the financial equilibrium. These conditions require measures to mobilize resources, control expenditures and set up mechanisms to mitigate the burden on the investment budget.

The prices of these commodities increased by 40% compared to their level during the previous year. This will entail an increase of 5 billion DH in the expenses of the Compensation Fund by the end of 2018, he added.

In view of the decrease in resources from international cooperation, he estimated, the deficit of the Treasury in 2018 should reach 3.8% instead of 3% of GDP provided in the finance Act.