Final window for the amnesty of arrears to the CNSS. These days are decisive for the future of the Fund and the social protection system in Morocco.
Unbeatable discounts on penalties and arrears of contributions to the CNSS. Last day to enjoy it! This is the last chance for Moroccan companies and employers to benefit from the exceptional discounts offered by the National Social Security Fund (CNSS) on penalties, fees and penalties linked to social security contribution arrears. After the resounding success of the tax amnesty, all eyes are now on the CNSS.
“The assets declared as part of the recent tax amnesty are estimated at 127 billion dirhams,” confirmed Mustapha Baïtas, government spokesperson. A significant tax contribution of 6 billion dirhams for the State.
But will the CNSS manage to duplicate this success? This operation, which ends this Wednesday, January 15, 2025, represents a major challenge for the financial balance of the social security system in Morocco.
“This is the final stretch to benefit from free discounts from the CNSS on social security contribution arrears. All that remains is today for those who wish to regularize their arrears thanks to this amnesty,” recalls a bank branch manager.
If the crowd seems less than during the tax operation, many taxpayers are still flocking to comply.
Substantial discounts to ease the burden of arrears
The levels of discounts granted by the CNSS on contribution arrears constitute a real breath of fresh air for heavily burdened companies. Let’s take the example of an SME which accumulates 500,000 dirhams in arrears, with 200,000 dirhams in penalties and fees and 100,000 dirhams in fines.
By opting for full payment, she would benefit from a 60% discount on the 200,000 dirhams in penalties, or 120,000 dirhams in savings. Of the 100,000 dirhams in fines, the 90% discount would allow him to give up 90,000.
In total, 210,000 dirhams would be erased from an initial debt of 800,000 dirhams. A reduction of more than a quarter which could prove decisive in regaining a certain financial solidity.
Even if you opt for payment spread over several years, the discounts would remain very attractive with up to 40% on penalties and 70% on fines. A boon for businesses which will be able to relaunch on much healthier foundations.
A fund on the verge of a financial abyss
Beyond the record figures for the tax amnesty, it is the very future of the CNSS that is at stake. Hit hard by the economic crisis, it must today face an abysmal deficit and reserves which are dwindling from year to year.
The financial situation of the fund is now in bright red. According to updated projections, the basic scheme for employees would show an annual deficit of nearly several billion dirhams. An astronomical figure which illustrates the extent of the rout for this pillar of the Moroccan welfare system. It’s a bit as if the CNSS’s wallet was inexorably emptying, due to lack of sufficient income to cover outflows. The reserves which until then made it possible to cushion the deficits have been considerably thinned.
At this rate, the CNSS could find itself in cessation of payments according to the most alarmist scenarios. A dramatic prospect for the millions of beneficiaries who rely on these social benefits for their retirement, health coverage or family allowances. The causes of this hemorrhage are multiple: aging of the population, rampant informality in the economy, lasting impact of Covid on employment… So many factors which are weighing down revenues while expenditures are increasing inexorably.
Faced with the emergency, the solutions seem limited: increasing contribution rates, raising the retirement age, tightening the conditions of access to benefits… So many painful remedies to swallow for citizens and the economic world . If it is not resolved in the coming years, this time bomb could well implode the entire structure of social protection in Morocco. A vital issue for the future of the Kingdom which requires courageous reforms and the mobilization of all stakeholders.
A vital lifeline
This amnesty operation is crucial for the sustainability of our social protection system. The unrecovered arrears constitute a sword of Damocles over the head of the fund. By allowing a substantial part of it to be recovered, this measure can offer real financial respite. With such a large stock of arrears, the CNSS is facing real financial crisis. A chronic hemorrhage of resources which deprives it of precious income, at a time when its expenses continue to increase.
“It’s a bit like letting tap water run indefinitely without doing anything,” illustrates an expert in social security.
At some point, the reserves end up drying up completely. “By allowing defaulting companies to pay off part of their debts with substantial discounts, the current amnesty could therefore make it possible to recover several billion dirhams at once. Let’s take the example of a company that owes 5 million dirhams in arrears over three years. By opting for a full payment, she would only pay 1.8 million thanks to the 60% discount on penalties and fees. An effort, certainly significant, but much less than the initial amount due. And, above all, a fresh income for the CNSS.
In total, if the operation is a great success, billions of dirhams could be mobilized. A real breath of fresh air for a bloodless body. Because although it is essential, this amnesty is only temporary. To absorb its structural deficits which amount to billions each year, the CNSS will absolutely have to review its economic model and close its collection loopholes, otherwise it will go under.
Mandatory success
For most experts, this CNSS amnesty operation must absolutely be a success, otherwise it will further weaken the regime’s already precarious financial balance. “The tax amnesty showed the way by making it possible to mobilize colossal resources.
The CNSS must take the same path otherwise it will seriously jeopardize its finances,” warns an economist. Several factors argue in favor of a favorable outcome. First of all, the advantageous conditions offered by the CNSS with discounts of up to 90% should encourage more than one to take the plunge. Then, the resounding success of the tax amnesty, with 125 billion dirhams declared, may have created a favorable psychological precedent among taxpayers.
Finally, the period of economic crisis has forced many companies to accumulate sometimes high social debts. This operation therefore represents a real lifesaver. However, some voices are being heard calling for caution.
“Despite similar objectives, the CNSS amnesty targets a different population with varying risk profiles and payment capabilities. We cannot therefore rule out the possibility of a mixed result,” adds a financial analyst.
Indeed, if the tax authorities were able to convince large fortunes, the CNSS must deal with a more heterogeneous ecosystem of employers: from industrial heavyweights to VSEs in difficulty, including the chronically informal. Not everyone has the same financial resources nor the same relationship to the rule.
Some will play the game, others will chomp at the bit. So what will be the final verdict? Frank and massive success allowing real sanitation? Where is the half-success marring the relaunch of the CNSS? Response in a few days at the end of this high-risk operation for the future of social protection in Morocco.
Bilal Cherraji / ECO Inspirations
