Report: The Informal Economy Accounts for 30% of GDP and Restricts Funding Capacity for Social Programs
A recent report from the Economic, Social and Environmental Council reveals that the informal economy in Morocco still represents about 30% of the gross domestic product, posing significant challenges to expanding the tax base and enhancing the state’s ability to finance social programs.
The report points out that the continued expansion of this sector reduces the tax resources that can be mobilized to fund public policies, especially those related to social protection and the improvement of basic services. It notes that a significant portion of economic activities occurs outside the legal and tax frameworks.
The same source adds that while the informal economy provides job opportunities for a large number of citizens, it also leaves workers outside the social protection system and limits their full integration into the organized economic cycle.
The report emphasizes that integrating this sector is a crucial challenge for promoting economic growth and achieving social justice. It calls for gradual and comprehensive approaches aimed at encouraging informal actors to integrate into the formal economy by simplifying administrative procedures and providing tax incentives as well as support for very small enterprises.
The report further stresses the importance of improving the business climate and building trust between economic actors and institutions. This would contribute to expanding the tax base and mobilizing additional resources to finance social programs and develop public services.
