Corporate Tax: Hydrocarbon Companies Under Fiscal Scrutiny, Motorists Left at the End of the Line?
2027 Budget Relies on Corporate Tax Increase for Additional Revenue
The 2027 budget aims to generate an additional 30 billion dirhams compared to 2026, heavily relying on corporate tax (IS). The only sector facing an increase in its tax rate is large importers and distributors of hydrocarbons. This targeted measure raises an important question: will this additional tax burden be absorbed by operators, or will it, at least partially, be passed on to consumers at the pump?
The proposed finance bill intends to raise the corporate tax rate for hydrocarbon importers and distributors with a net profit of at least 100 million dirhams from 35% to 40%. These companies would join the ranks of sectors already subjected to a 40% tax rate, including banks, financial institutions, and insurance and reinsurance companies.
Between the budget estimate and its impact on the real economy remains an unknown. In the fuel sector, the issue transcends corporate accounts, directly impacting households’ purchasing power and professionals’ costs.
Will Motorists Foot the Bill?
An increase in profit tax does not automatically result in a rise in prices. The IS is calculated based on a company’s taxable income, not on every liter of fuel sold. Therefore, a rate increase does not inherently serve as a mechanism for increasing pump prices. However, operators might seek to protect their profit margins. To what extent could a heavier tax burden be passed on to selling prices? This will largely depend on competitive conditions, the companies’ ability to absorb the tax, and their pricing strategies.
If operators have enough leeway to adjust their prices, a portion of the additional cost could theoretically be passed on to consumers. Conversely, stronger competition or a desire to maintain sales volumes could limit the transfer of this cost.
Could the rise in IS, then, increase fuel prices regardless of crude oil price fluctuations? This is one of the key questions raised by the measure. It will be important to understand the magnitude of this tax increase in the operational costs of the affected companies and to observe their pricing behavior once the IS rate increase is enacted.
The price at the pump depends on several factors, including international market prices for petroleum products, exchange rates, and supply and distribution costs, along with commercial margins. Any potential impact of the tax increase would add to these determinants without necessarily resulting in an equivalent hike for the consumer.
A Fiscal Yield That Extends Beyond the Fuel Sector
The budgetary stakes are anything but trivial. In 2025, gross IS revenues exceeded 100 billion dirhams, with corporate tax accounting for 34% of state tax revenues. The government plans to further rely on this source in 2027. However, the anticipated increase in revenues cannot solely be attributed to the rise in rates for hydrocarbons; it will also depend on the overall performance of corporate profits and the efficiency of tax collection.
In the case of hydrocarbons, the implications are more immediately apparent to the general public.
