Written by 5:16 pm Economy

Morocco cracks down on cash transactions to fight tax evasion by businesses

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Moroccan tax authorities are investigating a suspected tax evasion scheme involving small and medium-sized businesses (SMBs) in key sectors like telecommunications, transportation, and water and electricity.

Several businesses are accused of manipulating their finances to avoid paying the correct stamp duty, a tax levied on specific financial transactions.

The investigation centers around allegations that these SMBs are underreporting the value of their cash transactions.

This underreporting likely involves manipulating receipts and other financial documents to show lower transaction amounts. By presenting a smaller financial picture, they aim to pay less stamp duty to the government.

Adding to the suspicion, tax authorities discovered serious accounting errors in the businesses’ invoices. These errors could be unintentional mistakes, but they more likely served to obscure the true value of cash transactions further and strengthen the case for potential tax evasion.

The widespread use of cash transactions in Morocco presents a complex problem for the government.

On the one hand, cash transactions make it incredibly difficult for tax authorities to track the flow of money and ensure all taxes are being paid. This lack of transparency hinders practical tax collection efforts.

On the other hand, cash transactions are a significant source of tax revenue for the Moroccan government. Stamp duties and registration fees, heavily reliant on cash transactions, recently contributed to a substantial increase in government income.

Tax experts believe that tightening controls on stamp duty collection is crucial and recommend requiring businesses to declare and pay stamp duties more frequently, potentially moving from a monthly to a weekly system. Additionally, a shift towards electronic declarations could significantly improve the accuracy and efficiency of tax collection by providing a clearer picture of financial activities.

Morocco faces a challenge in balancing the need for tax revenue generated by cash transactions with the need for transparency and efficient tax collection.

The post Morocco cracks down on cash transactions to fight tax evasion by businesses appeared first on HESPRESS English – Morocco News.

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