Morocco loses $4 billion in untaxed revenue yearly from informal sector, study
Morocco is losing up to $4 billion in untaxed revenue every year to the approximated 1.68 million informal economic operations it hosts.
According to the findings of the National Survey on the informal sector conducted by the Morocco’s High Commission of Planning, the commission definedthe informal sector as including all non-agricultural economic activity conducted underground, without the authorization of the relevant authorities. The scope excludes illegal black market activities, however.
Researchers tracked 10,085 informal production units (UPIs) over a period of 12 months to follow the seasonality of their work. They estimate the size of the informal sector has grown by 1.2 percent, or 19,000 operators, every year since the last time a similar evaluation was conducted in 2007.
More than half of the operators did not have a fixed place of work – especially those employed by the construction, services and trade sectors under the table.
The industrial manufacturing sector sees the highest proportion of informal employees living at their place of work or working from home. Sixty percent of those working from home were women.
A survey of informal workers’ education found the sector’s workforce to be severely undereducated.
More than two-thirds of the workers have only completed preschool or elementary education, 28.4 percent finished secondary education and a mere 3.3 percent pursued higher education.
The HCP did not recommend the systemic absorption of informal economic activity though formal channels because the sector provides a buffer zone for temporarily unemployed people to afford basic living expensive.
It added that concerns regarding lower government revenues due to the sector’s non-payment of taxes are unfounded because the workers’ individual earnings are usually too low to be taxed.
“The informal sphere appears therefore as a suitable medium business windfall benefiting consumer demand…insecurity of supply, and the quality of the working hands in the labor market,” the commission said.
