The Economic and Social Council considered that “one of the conditions for the transition of street vendors to the organized sector, and among the conditions for liberating energies for an active and productive economy, is the existence of an integrated legal environment that frames the activities of street trade.”.
The council document also stated that “there is an urgent need for the national legislative system to supplement its arsenal by approving the legal status of street vendors of all categories, stipulating the conditions and obligations imposed by the practice of street commerce, defining and simplifying procedures, clarifying powers regarding the exploitation of public space, and approving penalties in case of violation of the law.“.
Affected categories
If the country is suffering from bleeding due to the informal economy, then a large group of workers, merchants and craftsmen are groaning in silence because of their work in the field. “the shadow” Without protection and minimum rights.
In this regard, political analyst Dr. Khaled Fathi said: “The informal sector in general, and all those who belong to it, including workers, merchants and craftsmen in particular, is a chronic problem related to the weakness of the economy and weak governance, and these, in my opinion, are a group with subjugated rights and suffer a lot, and they are not responsible for their irregular situation.“.
Fathi explained in an interview with the site “Sky News Arabia“:”The conditions of the pandemic showed that there was an urgent need for their justice. These sellers, artisans and simple workers were required to withstand during the quarantine with simple resources, although that is almost impossible. Nevertheless, the state succeeded in supporting the informal sector to make the stone successful.
And he went on to say,: “The pandemic and how to deal with it, constituted a point of societal awareness of the possibility of developing a final solution to the phenomena associated with the informal economy. Now they will be integrated into social protection and compulsory sickness insurance. This is one of the manifestations of turning the Corona crisis into an opportunity for change, which Morocco did not miss, and therefore this step will enable their structure, organization and entry into the economic cycle.“.
Khaled Fathi admitted that integrating them into the economy “constitutes a very big challenge in which good intentions are not only beneficial, but effective scenarios need to be developed and wealth production at the national level so that these measures have a meaning and a tangible impact.”“.
The analyst went on: “The legal and tax approach is not sufficient to solve this thorny problem. Rather, it is necessary to break with the causes that spawn the phenomenon, the most important of which are unemployment, closure of the horizon, emptiness and rural migration, and this is linked to a strategic vision of the economy.“.
“Bleeding” due to the informal economy
There is no doubt that the employment of a number of actors in the shadows and outside the tax system misses the state important incomes.
A study on “Measurement and Development of the Informal Economy in Morocco”, the results of which were published on the electronic portal of the Central Bank of Morocco, stated that the informal economy in Morocco fell to a level of less than 30% of the gross domestic product during the period between 2009 and 2018, but despite the decline Remarkably, it still represents a hole in the pocket of the Moroccan economy.
The participants in this study explained that the informal economy experienced three distinct periods of development: the first during the period between 1988 – 1998, when the informal economy stabilized at approximately 40% of the gross domestic product, followed by the period from 1999 to 2008, which witnessed a decline The informal economy increased to 32-34 percent of GDP, up to the 2009-2018 period, which was characterized by a continuing downward trend, but at a more moderate pace, reaching a level of just under 30 percent of GDP..
Expansion of the tax base
Commenting on these figures, Dr. Abdul-Rahman Fadlawi, an expert in the tax field, said that “it is necessary to conduct a comprehensive objective study, including the social and economic aspect, in order to search for points of intersection between the taxation of the informal sector and the social state.”“.
Fadlawi confirmed, in a statement singled out for him “Sky News Arabia“, that there is a tendency aimed at taxing the informal sector, by evaluating what can be extracted from it for the benefit of the state treasury, and this is represented in controlling and expanding the existing tax base“.
The expert in public law and political science, added that the authorities launched in this regard a series of projects to integrate workers in the informal sector, by launching the self-contractor card, for example..
It should be noted that the tax incentives and the recovery of the activity of small professions contributed to raising the number of self-entrepreneurs to unprecedented levels in Morocco, during the year 2021..
Statistics issued by the Ministry of Economy and Finance indicate the stability of the number of people holding self-entrepreneur cards, until the end of last October, at about 340,000 self-entrepreneurs; While the number of applications submitted by individuals wishing to obtain this card, since the introduction of this system in 2015, has reached about 445,000 applications..
government plan
The government of Aziz Akhannouch aims to reduce the size of the informal economy by reforming the tax system, by creating an economy that accommodates all, in which all groups contribute..
Moroccan Prime Minister Aziz Akhannouch said, addressing the nation’s representatives, on October 11th: “If it is true that the epidemic related to the Covid-19 virus was not behind all the problems, its rapid transmission has clearly revealed the economic and social shortcomings that our country is facing. The crisis exposed the size of the informal economy, the shortcomings in the social sectors, and the weakness of social safety nets“.
In light of these facts, the government will deal with the negative aspects of the informal economy, which has been benefiting indirectly from tax evasion and wasting abundant income on the state treasury..
The principle of tax neutrality and justice will enable the state to enhance the capabilities of the state by about 20%, which will allow the availability of capabilities to finance social sectors such as health and education, as well as reconcile direct support to needy groups..
The reform includes the revision of the income tax and the expansion of the base of occupational income taxes, in order to support the low-income and middle classes.
This section constitutes one of the important files that the Akhannush government will deal with with the economic and social developments, to reach a more coherent and transparent tax system, to achieve development and the goal of the social state..
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