State tax expenditures reached 38,015 million dirhams in 2026, marking a 13.7% increase over the previous year, according to official budget documents annexed to the 2027 finance bill. This financial allocation represents roughly 2% of the gross domestic product and stands at nearly twice the size of the national compensation fund envelope.
Tax Expenditures Compared With Public Budgets
The 38 billion dirhams in foregone revenue eclipse several major public allocations outlined in fiscal planning. This total is nearly double the 19.4 billion dirhams earmarked for subsidizing butane gas, sugar, and flour. It outweighs by seven times the estimated 5.5 billion dirhams cost of the income tax scale adjustments planned for 2027.
Did You Know? The official inventory identifies 283 active tax exemption measures, of which 241 have been formally evaluated, giving the government an 85% evaluation rate.
Sector Breakdown of Exemptions
Value-added tax concessions generate the largest share of foregone revenue, accounting for 47% or 17,848 million dirhams of the total. A single provision—the reduced 10% VAT rate applied to petroleum and shale oils—accounts for 7,876 million dirhams, representing 20.7% of the entire fiscal expenditure envelope.
Active tax measures reveal deep structural inertia
Data show that 86% of the 283 currently active tax measures were adopted before 2021, and they account for 93% of the financial cost recorded in 2026. Import duty expenditures drove the recent annual surge, climbing by 2,859 million dirhams and explaining 62% of the overall increase from the previous budget cycle.
Households and businesses share the fiscal benefits
How do households and businesses share these financial benefits?
Official tallies indicate households receive 48.8% of the envelope amounting to 18,534 million dirhams, while businesses capture 46.1% or 17,530 million dirhams.
What are the primary stated policy objectives of these fiscal measures?
How might future budget reforms alter the balance between blanket tax exemptions and direct social support mechanisms?