Morocco increases solidarity tax on insurance: who will be punished?

Morocco increases solidarity tax on insurance: who will be punished?

On August 30, 2025, the Moroccan government in Rabat adopted a draft to increase the “solidarity tax against disasters”. This move, presented by Economy and Finance Minister Nadia Fettah, is part of the implementation of Law 110.14, which establishes a system of insurance against catastrophic events. This is a direct response to the devastating Al Hoauz earthquake that struck the region on September 8, 2023.

Government spokesman Mustapha Baitas explained that the new regulation is based on the existing legal framework. The aim of the measure is to strengthen the financial capacity of the Fund, which will be better able to meet obligations to affected persons with the additional revenue, which will be increased from 1% to 1.5% of insurance premiums and contributions.

Protection through higher taxes

The additional revenue from this tax will flow into the “Fonds de solidarité againsttre les événements catastrophiques” (FSEC), which will benefit those affected who do not have their own insurance. The measure affects various lines of insurance, including motor vehicle, ship and aircraft insurance, liability policies as well as health and accident insurance. However, life insurance and certain contracts of persons or companies based abroad are excluded from this regulation.

The increase in the tax comes as the Moroccan government points to a global increase in natural disasters, which is also driving up the cost of reinsurance. After the Al Hoauz earthquake, the fund's expenses to cover seismic risks doubled. This highlights the need to provide the financial resources to be better prepared for such disasters.

Criticism and challenges

However, the media also report critical voices about the decision, which was made at the time of the upcoming new school year and immediately after the summer holidays. This could put households under financial pressure as they now face higher insurance premiums. The exact additional burden for policyholders depends heavily on the type and amount of the respective premiums. This reform will therefore affect both private individuals and companies and could lead to higher financial burdens in the affected insurance lines.

A similar picture emerges in Europe when looking at responses to natural disasters. According to the latest information, almost 718.5 million euros from the European Union Solidarity Fund (EUSF) will be distributed to several states to help them deal with disaster damage. Countries supported include Germany, Belgium, the Netherlands, Austria and Luxembourg, all of which were affected by the devastating floods in July 2021.

The EU has also provided funding for other natural disasters, including €9.5 million for the volcanic eruption in La Palma, Spain, and €1.4 million for the earthquake in Crete, Greece. These funds are part of a comprehensive support mobilized for 100 disasters since the EUSF was founded in 2002, including numerous forest fires, storms and droughts. To date, more than 28 European countries have received over 7 billion euros in aid, highlighting the importance of such funds to provide support in times of crisis.

These developments in Morocco and Europe highlight the ongoing need to take preventative measures against natural disasters and adapt financial resources accordingly.

For more details on the solidarity tax increase in Morocco, visit Maghreb Post and for information on EU aid, consult the European Parliament.