PJD proposes additional alcohol tax hike in 2024 finance bill vote, govt rejects it

PJD proposes additional alcohol tax hike in 2024 finance bill vote, govt rejects it

The Justice and Development Party proposed an increase in taxes on wine, beer, and alcoholic beverages, sparking a debate in parliament, during Tuesday’s voting session on the first part of the 2024 budget law. 

The government rejected this amendment, claiming that taxation on these products has already reached high levels.

Mustapha Al Ibrahimi, a parliamentary deputy for the Justice and Development Party, said during the general session that Moroccans consume an average of 24 liters of alcohol annually. 

Al Ibrahimi said  that not increasing taxes on alcohol would lead to increased costs, affecting the budgets of health coverage and hospitals, as well as consumers without health coverage.

The deputy said that some European countries resort to taxing alcohol due to its association with liver cancer, and other types of cancers, as well as chronic diseases.

Al Ibrahimi emphasized that several countries have resorted to taxing alcohol to reduce consumption rates.

On the other hand, Hicham Ait Menna, a parliamentarian from the Authenticity and Modernity parliamentary group, downplayed the figures presented by Al-Ibrahimi and their significance. 

Ait Menna argued that 24 liters per year, or 2 liters per month, equivalent to 6 beers per month, is not a significant amount,  adding that alcohol taxation is already high, and further increases would encourage the informal sector. 

Ait Menna said that Moroccans should not be bound by the law in this matter, because not only non-Muslims consume alcohol, and everyone has their own religious beliefs.

The government eventually rejected the Justice and Development Party’s amendment. 

Minister of Economy and Finance Nadia Fettah said that the taxes on alcoholic beverages are already high in the budget law, reaching 74% for beer, 70% for spirits, and 70% for alcohol. 

Fettah added that this level of taxation is sufficient to increase revenue and reduce consumption without encouraging the use of smuggled goods.

Lekjaa had previously voiced a similar opinion saying that raising taxation “would encourage the trade of alcoholic substances illegally, thus promoting smuggling operations, posing a health risk to citizens.” 

Lekjaa considered the gradual taxation rates included in the budget law realistic, taking into account both the health of citizens and the economic reserves of the state. 

On the other hand, Lekjaa justified the refusal to raise taxes on cigarettes, stating that it also encourages smuggling operations.

In a related context, Aziz Elbar, a parliamentarian of Authenticity and Modernity, defended the Justice and Development Party’s amendment, calling for an increase in taxes on alcohol to preserve the health of citizens and generate revenue for the state fund. 

Elbar said that the main consumers of alcohol are the middle and lower classes, affirming that more than 90% of alcohol consumers are Moroccans. He further urged a reconsideration of the law because foreigners consume only a small amount of alcohol.

The first part of the budget law was approved at the conclusion of a debate session that extended from last Friday evening until Saturday morning, lasting for about 13 hours. 

It garnered the approval of 22 deputies, while 9 deputies opposed it. 

The total number of amendments proposed by majority and opposition groups during this meeting, attended by the Minister Delegate for the Budget, Fouzi Lekjaa, reached 410 amendments.

These amendments included among others internal consumption taxes, particularly on alcoholic beverages. 

Some deputies called for “increasing the import duty on non-alcoholic stimulant beverages and beer from MAD 600 to MAD 1500 ,” and “from MAD 30,000 to MAD 50,000 on materials used or contained in alcoholic beverages and alcohol-containing sweets.”


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