Morocco's Local Tax Revenues Rise 8.6% by Mid-2026, Driven by Direct and Indirect Taxes

Morocco's local tax revenues have experienced a notable upswing, reaching 25.24 billion dirhams by the end of June 2026. This represents an 8.6% increase compared to the same period in the previous year, according to the General Treasury of the Kingdom. The growth is primarily driven by a 7.6% rise in direct taxes and a 9.5% increase in indirect taxes. These tax revenues constituted 88.8% of the total income for local authorities at the end of June 2026, underscoring their critical importance to municipal finances.

Despite the positive trend in tax collection, transferred resources saw a marginal decrease of 0.3%, amounting to 16.05 billion dirhams compared to 16.11 billion dirhams a year earlier. This decline is largely attributed to significant drops in subsidies, which fell by 64.7% (a decrease of 622 million dirhams), and support funds, down by 33% (483 million dirhams). Additionally, the share of revenue from insurance contract taxes decreased by 100% (329 million dirhams). However, this was partially offset by a 14.1% increase in the local authorities' share of value-added tax (VAT) revenue, which rose by 1.462 billion dirhams. The VAT share now forms a substantial 41.8% of local authorities' total revenue.

Resources managed by the state on behalf of local authorities also saw a slight increase of 0.6%, reaching 6.15 billion dirhams. This growth was fueled by a 4.2% rise in communal service tax revenues (168 million dirhams), despite a decline in professional tax revenues by 5.1% (87 million dirhams) and housing tax revenues by 11% (44 million dirhams). Meanwhile, resources directly managed by the local authorities themselves experienced a significant jump of 18.9%, totaling 6.20 billion dirhams compared to 5.22 billion dirhams in the prior year. These directly managed resources are mainly composed of revenues from taxes on undeveloped urban land (2.62 billion dirhams), fees for temporary occupation of public spaces (599 million dirhams), construction taxes (511 million dirhams), and state property revenues (429 million dirhams).