Morocco fuel prices: corporate tax could reach 40%
Morocco's draft 2027 budget proposes raising corporate tax on major fuel import and distribution firms to 40%, with experts warning the cost could be passed on to consumers at the pump.
Morocco fuel prices could rise at the pump after the government proposed, in the draft 2027 finance bill, raising the corporate income tax (IS) on major hydrocarbon import and distribution companies to 40%. The measure targets firms with annual net profit above 100 million dirhams, as experts warn the added cost risks being passed on to consumers.
A tax that has climbed steadily since 2023
The increase continues a path set by framework law No. 69-19 on tax reform, which aims to raise the tax contribution of companies operating in regulated sectors or in monopoly or oligopoly positions. The corporate tax rate for this category of companies rose from 32% in 2023 to 33% in 2024, then 34% in 2025 and 35% in 2026, before the 2027 finance bill proposed pushing it to 40% specifically for hydrocarbon importers and distributors.
| Year | Corporate tax rate |
|---|---|
| 2023 | 32% |
| 2024 | 33% |
| 2025 | 34% |
| 2026 | 35% |
| 2027 (proposed) | 40% |
Concerns over a pass-through to consumers
Tax specialists say the measure's economic effect remains uncertain, calling it more a political decision than an economic one. Experts say distributors, like any business, will seek to protect their margins, which could lead them to pass part of the added cost on to consumers at the pump. Some observers cite a hypothetical cost increase of 20 centimes per litre, which could translate into a larger rise in the retail price without strict safeguards. To avoid that scenario, experts propose a legal cap on distributors' net margins, greater price transparency, regular monitoring of margins and costs, and stronger enforcement against anti-competitive practices.
Precedents from the Competition Council
Morocco's Competition Council has previously published data on the net margins of fuel distribution companies, at a time when these firms had paid a 1.84-billion-dirham settlement in a case over unlawful price coordination. The new measure, part of a draft finance bill that also includes raising the income tax exemption threshold, remains under discussion in parliament and has not yet been adopted in final form.