Moroccan Government Looks to Taxes to Cut Deficit

A deserted street in Moroccan capital Rabat, as the country is put under lockdown. (AFP)
A deserted street in Moroccan capital Rabat, as the country is put under lockdown. (AFP)
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Moroccan Government Looks to Taxes to Cut Deficit

A deserted street in Moroccan capital Rabat, as the country is put under lockdown. (AFP)
A deserted street in Moroccan capital Rabat, as the country is put under lockdown. (AFP)

Morocco aims to increase tax revenues to better finance public policies and cut the fiscal deficit, its finance minister told Reuters on Wednesday, after the COVID-19 pandemic caused a surge in spending.

A new law to increase the tax base, ensure equity, fight fraud, introduce a carbon tax and impose a fairer VAT system for business was approved by the Parliament on Tuesday.

The new legislation “aims at reinforcing the efficiency of the tax system as means of financing public policies,” finance minister Mohamed Benchaaboun told Reuters in an email.

Morocco has incurred a fiscal deficit of 7.6% in 2020 and expects to cut it to 6.3% this year, compared to the pre-pandemic target of 3%.

In 2020, Morocco collected 144.8 billion dirhams ($16.2 bln) in net tax revenue, down 5.4% compared with 2019, official data showed.

Nearly 50% of income tax, company tax and VAT combined is paid by just 140 companies, according to official figures. Just 1% of companies account for 80% of corporate tax revenue.

Morocco loses up to $2.45 billion due to tax evasion and fraud by multinationals, Oxfam said in a report in 2019.

Besides the tax reform, the government has also submitted a draft law for Parliament’s scrutiny on reforming, merging or dissolving state bodies to reduce their dependency on a state budget.

Government debt was sustainable despite a rise to 76.4% of GDP in 2020 from 64.8% in 2019, Benchaaboun said, citing low average cost and limited exposure to risks.

Foreign debt represented 24% of overall government debt made up of 61% in euro and 34% in dollar and currencies pegged on it, the minister said.

He declined to answer questions about the value and timing of the upcoming bond that the government plans to raise which local media, Assabah, said last week could amount to $1 billion.

Morocco can consider renewing a precautionary credit line from the International Monetary Fund as an insurance against external shocks although “there is no immediate need for it” as foreign exchange reserves cover over seven months of import needs, he said.

Morocco has taken a second step in its currency reform extending last year the band in which the dirham fluctuates to 5% from 2.5%, in a bid to strengthen “the economy’s resilience to external shocks and boost its competitiveness.”

Morocco “is committed to this reform and will continue its gradual and cautious approach,” he said.



Saudi Arabia Completes 90% of Arabian Shield Survey

Drilling and excavation work at a site in the Arabian Shield region, Saudi Arabia (SPA)
Drilling and excavation work at a site in the Arabian Shield region, Saudi Arabia (SPA)
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Saudi Arabia Completes 90% of Arabian Shield Survey

Drilling and excavation work at a site in the Arabian Shield region, Saudi Arabia (SPA)
Drilling and excavation work at a site in the Arabian Shield region, Saudi Arabia (SPA)

Saudi Arabia is advancing its exploration of mineral resources in the Arabian Shield, a region covering 630,000 square kilometers, about a third of the country.

The Kingdom has completed 90% of the survey and released geological data covering 400,000 square kilometers, or 65% of the total survey area.

Speaking to Asharq Al-Awsat, CEO of the Saudi Geological Survey Abdullah Al-Shamrani affirmed that this aims to attract investment in the mining sector.

The Arabian Shield is crucial for Saudi Arabia, as it contains key metallic minerals such as silver, gold, zinc, and copper.

The Arabian Shield runs along the Red Sea coast and the Gulf of Aqaba, from northern Jordan to the Saudi-Yemeni border. It covers regions such as Tabuk, Madinah, Makkah, Al-Baha, Asir, and Jazan, spanning 630,000 square kilometers, or about one-third of Saudi Arabia's land.

The geological survey in this area plays a key role in developing the sector, providing accurate data to attract both local and international investments.

This supports economic growth and helps diversify income sources in line with Saudi Arabia's Vision 2030.

In a statement to Asharq Al-Awsat at the fourth edition of the world’s leading platform on minerals, the Future Minerals Forum (FMF), Al-Shamrani revealed that a new batch of geological data covering 65% of the geophysical survey in the Arabian Shield was released.

This move opens up new opportunities for mining investors.

The project started in 2021, when the survey began collecting and analyzing data on the mineral wealth in the Arabian Shield.

After nine months of work, the database now covers 400,000 square kilometers, providing detailed information to guide investment decisions in mineral exploration, according to Al-Shamrani.

These data are not just technical but are driving increased demand for mining licenses, highlighting the value of accurate information in attracting investment.

Thanks to digital tools, investors worldwide can easily access this data, supporting investment in promising mining projects. With each new update, Saudi Arabia gets closer to completing the full survey of the Arabian Shield.

Al-Shamrani explained that the data includes interconnected layers of geophysical and geochemical information, such as analysis and drilling results. Each new update provides valuable insights for investors, helping them make data-driven decisions.

He also expected that the remaining data sets would be released soon, completing all work in the Arabian Shield.

Mustafa Maki, head of the National Geological Database Initiative at the Saudi Geological Survey, told Asharq Al-Awsat that the new coverage of the airborne geophysical survey includes magnetic and radiometric data, showing a 5% increase over previous periods.

Forty-three new squares have been added, bringing the total to 164 out of 252.

The data is now being processed and will soon be available to investors and visitors through the Saudi Geological Database.

The Saudi Geological Survey has launched new coverage for the surface geochemical survey of valley sediments, adding maps showing the distribution of individual elements and their statistical data.

This expansion covers an additional 20% of the previous area, bringing the total to 10 out of 50 geological squares.

The survey includes data on 57 out of 75 chemical elements, mapped to show their distribution in the squares. Statistical information on these elements has also been released, according to Maki.

Maki emphasized that geological data is crucial for the mining industry worldwide. Investors rely on this data to decide whether to proceed with investments or detailed exploration.

He added that the data from the Saudi Geological Survey, including geophysical and geochemical surveys, provides a strong knowledge base for investors.

This, along with technical reports and other geological data, helps investors make informed decisions about mining and exploration in the Arabian Shield.

Rana Zamai, Chair of the Women’s Empowerment Committee in Mining at the Ministry of Industry and Mineral Resources, confirmed to Asharq Al-Awsat that all necessary requirements for establishing the Women in Mining Association have been completed.

The association is expected to be launched on the upcoming International Women's Day.

Zamai highlighted that a special networking event was held at the FMF, bringing together women from the public and private sectors in mining from 80 countries.

The event was attended by five female leaders from major women’s mining organizations, representing countries like the UK, South Africa, Australia, and Türkiye.

She also pointed out that a key highlight this year was the participation of 25 geology students from King Abdulaziz University, the first group of its kind in Saudi Arabia. The students are expected to graduate in three to four years.