Good economic prospects for Morocco. The International Monetary Fund (IMF) expects the kingdom to be able to mobilize additional tax revenue that has not been mobilized. The banking institution ensures that the share of these revenues in the Moroccan economy, and more precisely in the GDP, is still very low, but despite this, it should improve the economic prospects for growth and social inclusion.
The entity estimates that within the Maghreb, the difference between actual and potential tax collection represents 12% of the national GDP. Specifically, tax revenue accounts for 21.6% of GDP, while the IMF says the potential could be as high as 33.8%. So the IMF believes that the government has the opportunity to significantly increase its revenue. This can be done by approximating tax rates to the same levels as the country’s economic structures.
For the IMF, Morocco has made great progress in its economy. The North African country is experiencing a good expansion of its tax base. He believes that tax system reforms, personal income tax review, value-added tax, and property taxes can boost revenue collection. Similarly, the IMF believes that reforms aimed at reducing informality and promoting economic diversification can help mobilize revenue and thus generate more benefits.
All these benefits can give a boost to Morocco, which has been hit hard by the coronavirus crisis and the recent Russian invasion of Ukraine. In addition, the IMF also expects that modernizing and improving the efficiency of tax administrations would lead to stronger enforcement and enforcement of laws, through measures to combat corruption, improve governance and increase transparency. This will enhance Moroccans’ confidence in the tax system.
This is also reflected in some countries of the Middle East and some countries of North Africa. Although many countries have managed to expand their tax base by mobilizing additional tax revenue. In these countries, the difference between actual and potential tax collection is about 14% of GDP.
This issue focuses on recent global developments that are driving governments to increase spending. Accordingly, MENA leaders must increase budgets to protect the poor, lower food and fuel prices, modernize health and education systems, and build resilience in the face of future events that threaten the stability of their lives.
Other regions of the world, such as Central Asia, lag behind in terms of tax revenue collection. Tax revenue accounts for 12.6% of GDP, but emerging countries show an average of 15.3%. The cases of countries in Sub-Saharan Africa and Latin America and the Caribbean stand out, with GDPs of 15.6 and 17.8 per cent, respectively. According to the IMF, this low level of tax collection can be attributed to a number of reasons such as the use of direct taxes, particularly those related to personal and corporate income. According to the IMF, these are very limited and property taxes lag behind.
“Various indirect taxes on consumer goods account for the largest share of tax revenues (excluding oil and gas revenues), but exemptions are common and numerous.” The informal economy reduces the ability of governments to raise revenue.” Jihad Azour, head of the organization’s Middle East and Central Asia division, said. Azour says that, according to a study, eliminating blanket exemptions and ineffective incentives would broaden the tax base. This would make the tax systems fair and transparent, which would lead to a marked improvement in the situation.