The Moroccan government has just given the green light to a temporary corporate tax exemption for companies within the defense equipment and armament sector. This significant move aims to encourage businesses in this strategic industry to ramp up their investments in Morocco.
Meeting on Thursday, November 14, the Council of Government reviewed and approved a draft decree amending a previous decree from June 19, 2018, which outlines the activities eligible for temporary corporate tax exemptions under Article 6 of the General Tax Code. The new decree adds defense manufacturing to this list, marking a targeted effort to build up Morocco’s domestic defense capabilities.
Strategic focus on national defense industry
Abdelatif Loudiyi, the Minister Delegate for National Defense, presented this proposal on behalf of Budget Minister Fouzi Lekjaâ. According to a government spokesperson, the decree aims to provide tax relief to industries producing defense, security, and ammunition equipment, expanding their eligibility for corporate tax exemptions as specified in Article 6. By including this sector in the list of tax-advantaged industries, Morocco is making a clear bid to support and develop local production capacity for critical defense and security equipment.
New industrial zones signal long-term vision
In June, Morocco approved the creation of two defense-focused industrial acceleration zones to facilitate the establishment and growth of a domestic defense industry. The development of these zones, along with tax incentives, aligns with Morocco’s broader national defense strategy and demonstrates the country’s commitment to achieving greater self-sufficiency in defense manufacturing.
To further this ambition, Morocco has also bolstered its defense budget as part of the upcoming 2025 Finance Bill, recognizing the need for substantial investment to make this ambitious project a reality.
