The tax framework in Morocco has undergone significant changes, some of which have had a negative impact on long-term savings, according to Moroccan Insurance Federation president Mohamed Hassan Bensalah.
In 2015, the tax deduction for contributions to retirement products was limited to 50% of annual income, and in 2023, a non-final withholding tax of 15% was introduced for redemptions of retirement insurance contracts made before the age of 45 or before the minimum eight-year term provided for eligible contracts.
These changes have contributed to a recent drop in collections, with a 1.7% decrease in life insurance premiums in the first half of 2023 compared to the same period in 2022, reported Finance News Weekly citing Mr Bensalah.
In comparison, over the past 25 years, savings have experienced remarkable growth, with an average annual growth rate of 13%, largely due to the successful collaboration between banks and insurance companies. The distribution of life insurance products through banking networks has accelerated the development of these products.
Mr Bensalah made the comments during the inaugural savings fair held in Casablanca last November.
He expressed his concern over the decline in the attractiveness of long-term savings, emphasising that inflation is an additional factor which has negative consequences on savings.
According to him, Morocco needs savings more than ever to finance various projects, which makes the stimulation of savings an even greater priority today.
In his recommendations, he called for developing an ecosystem favourable to savings, including encouraging financial inclusion for segments of the population who lack financial literacy.