Morocco Cracks Down on Hidden Wealth, Targeting Tax Evaders
In a bid to bolster tax revenue and combat tax evasion, Morocco’s tax authority has launched a sweeping investigation into undeclared and hidden wealth. According to Moroccan newspaper Assabah, the investigation is primarily focused on civil servants and professionals such as doctors, lawyers, engineers, and notaries. The probe also extends to individuals holding assets registered under family members’ names, including spouses and children.
This crackdown comes after a disappointing response to the government’s voluntary disclosure program, which aimed to encourage individuals to rectify their tax situations. The lackluster participation has spurred authorities to implement stricter measures, including the forced auditing of suspicious assets and funds to recover unpaid taxes.
The tax authority is armed with sophisticated technology and data analysis tools to uncover hidden wealth. They are also collaborating with other government agencies, including the national police, the National Agency for Land Conservation, and Bank Al-Maghrib (Morocco’s central bank), to scrutinize suspicious bank accounts under an information exchange agreement for tax purposes.
A preliminary list of approximately 2,500 individuals suspected of possessing hidden wealth ranging from 500 million to 4 billion dirhams (approximately $50 million to $400 million USD) has been compiled. The majority of those on the list are self-employed professionals suspected of underreporting income or claiming false losses to minimize their tax obligations.
This initiative underscores a global trend of governments increasingly scrutinizing hidden wealth and tax evasion. The Organization for Economic Co-operation and Development (OECD) estimates that tax evasion costs governments worldwide hundreds of billions of dollars annually. In recent years, initiatives like the automatic exchange of information between countries and increased scrutiny of offshore accounts have helped to recover some of these lost revenues.
The Moroccan tax authority’s investigation is based on Article 216 of the General Tax Code, which allows for the assessment of income based on an individual’s lifestyle and expenses. This includes expenditures on education, vehicles, and household services. By comparing these expenses with declared income, authorities can identify discrepancies and potential tax evasion.
This crackdown on hidden wealth sends a clear message that Morocco is serious about tackling tax evasion and ensuring everyone pays their fair share. The success of this initiative could have significant implications for the country’s budget and its ability to fund essential public services.
