Financial institutions, including insurers and banks, will be required to pay a corporate tax rate of 40%, the government is proposing in the draft Finance Law 2025 (PLF 2025).
The current tax rate for insurers and other financial institutions is 35%.
In comparison, companies in the sectors of agriculture, regional development, pollution control, etc, will remain subject to a 10% tax, regardless of their turnover, while others, such as telecommunications network operators, oil companies and car dealerships, will be subject to a 35% tax.
With this proposed progressive tax scale, intended to lighten the tax burden of small companies while increasing it for large companies, approximately 80% of the corporate tax revenue will be provided by companies subject to taxation rates of 35% and 40%.
Fiscal burden
For the financial sector in general and insurance companies in particular, the tax burden will be even heavier with the introduction of a tax to contribute to the Social Protection Fund for Women Workers in the Agricultural Sector. This tax will be calculated at the rate of 1% of insurance premiums and contributions relating to all branches of insurance net of cancellations and taxes. This tax is not to be passed on to customers, as stipulated by the 2025 draft Finance Bill.
The insurance sector will also have to contribute to a proposed "Insurance Fund against Job Losses”. The fund seeks to provide support and professional reintegration for workers laid off for economic reasons.
Insurers are already contributing to other funds, such as the Guarantee Fund for Victims of Road Accidents.
Costs
Arguing against the corporate tax increase for insurers, an industry executive told the local media that costs are rising for insurers due to increases in salaries and overheads.
In addition, he said, “There has been an increase in the number of fires and the damage they cause. Compensation is constantly increasing, while civil liability rates, which are set by the state, have not increased since 2017. Life insurance, for its part, still only represents 25-26% of the sector's activity, while it reaches 35% in countries similar to ours such as Morocco.”
"Were it not for the relative good health of the financial market, the insurance sector would be making losses. Companies in the sector live off their investments. Managing their assets allows them to meet their liabilities (payment of benefits to customers and management costs)."