Broadening the tax base in Morocco: How to integrate the informal economy?

Résumé

Abstract

Morocco’s informal sector accounts for nearly 30% of GDP and over 40% of employment, yet remains largely outside the tax system, constraining fiscal revenues and equitable development. This study examines strategies to broaden the tax base through formalization of informal activities. Methodologically, the research adopts a sequential explanatory mixed methods design. Quantitative data cover the period 2015–2023 and were extracted from the Moroccan Ministry of Economy and Finance, the High Commission for Planning (HCP), the World Bank, and the IMF. The sample includes time‑series tax indicators, informal sector surveys (HCP 2015, 2019, 2023), and comparative fiscal benchmarks from more than 180 countries. Qualitatively, the study reviews three policy case studies (Brazil’s Simples Nacional, India’s GST, Rwanda’s digital transformation) and analyzes Morocco’s recent formalization reforms (Mouwafaqa, Ibtikar, Law 69‑21). The main conclusion is that administrative complexity, weak enforcement, low financial literacy, and distrust in institutions sustain informality. However, a coordinated strategy comprising a simplified flat tax for micro‑companies, digital filing tools, time‑limited tax amnesties, bundling tax registration with social security benefits, electronic invoicing, and cross‑agency data sharing could raise tax to GDP ratio by an estimated 3 to 4 percentage points. The paper provides a phased implementation roadmap tailored to Morocco’s institutional context, arguing that formalization is both fiscally necessary and socially beneficial.

Keywords: Tax base, informal economy, Morocco, tax policy, formalization, tax compliance.