The VAT (TVA) reform launched by Morocco's Finance Law 2024 is now complete. Since 1 January 2026, Morocco applies only two VAT rates: the standard rate of 20% and the reduced rate of 10%. The old rates of 7% and 14% have been permanently abolished under Finance Law n° 50-25. For how VAT works day-to-day (rates, HT/TTC, deductions, filing), see our VAT guide; this article focuses on the reform itself.
Timeline of the reform
- Finance Law 2024 – launched the convergence, beginning the phase-out of the 7% and 14% reduced rates.
- Finance Law 2025 – widened the reduced 10% perimeter.
- Finance Law 2026 (n° 50-25) – completed the reform: only 20% and 10% remain, plus a few exemptions.
Old system vs. new (2026)
| Old rate | New rate (2026) | Example products |
|---|---|---|
| 7% | 10% or exempt | Water, medicines, school supplies |
| 10% | 10% | Hotels, banking, catering |
| 14% | 10% or 20% | Low-voltage electricity, transport |
| 20% | 20% | Standard rate (most goods and services) |
One notable change: short-cut pasta (penne, macaroni; uncooked, unfilled) is now VAT-exempt, both domestically produced and on import.
Worked example: a product moving from 14% to 10%
A wholesaler sells goods that were taxed at 14% under the old system and are now at the reduced 10% rate. For a MAD 1,000 HT invoice:
Old (14%): TTC = 1,000 × 1.14 = MAD 1,140
New (10%): TTC = 1,000 × 1.10 = MAD 1,100
The consumer price falls by MAD 40 on this invoice – a small per-unit effect that compounds across volume. Conversely, goods that moved from 7% to 10% see a slight increase. Net consumer impact depends on the product basket.
How to calculate VAT in 2026
With only two rates, the math is simpler:
TTC = HT × 1.10 (10% reduced rate)
TTC = HT × 1.20 (20% standard rate)
HT = TTC ÷ 1.10
HT = TTC ÷ 1.20
Who is affected?
- VAT-registered businesses: verify the applicable rate for each product or service and update invoicing/ERP systems.
- Consumers: products formerly taxed at 7% or 14% may see slight price shifts.
- Importers: the same two rates apply to import VAT.
Goals of the reform
The DGI set out three objectives in circular note 737:
- Social equity – exemption of essential goods (e.g. pasta).
- Economic neutrality – reducing the "butoir" effect (unrecoverable VAT that traps businesses).
- Formalisation – integrating informal supply chains through self-assessment mechanisms.
FAQ
Why did Morocco reduce VAT to two rates?
To simplify the system, improve economic neutrality, reduce the unrecoverable-VAT trap, and align with international practice – as set out in circular note 737.
Are any products now exempt (0%)?
Yes – most notably short-cut pasta (uncooked, unfilled), both domestic and imported, alongside pre-existing exemptions for certain essential goods.
Did prices go up or down in 2026?
It depends on the product. Goods moving 14%→10% got cheaper; goods moving 7%→10% got slightly more expensive. The net effect is basket-specific.
Sources
- Direction Générale des Impôts (DGI) – tax.gov.ma
- Note circulaire n° 737 – DGI
- Loi de Finances n° 50-25 pour 2026 – finances.gov.ma
Disclaimer
This article is for general information only and does not constitute tax or legal advice. Rates and rules may change; always verify with the DGI or a licensed adviser for your personal situation.
Marouan focuses on corporate taxation, VAT, and business compliance in Morocco. He writes practical guides that help entrepreneurs and companies navigate the Moroccan tax system with confidence.
