The determinants of the tax base of Morrocan foreign trade: an econometric evaluation

Abstract

In the era of increasing globalization, international trade is recognized as one of the main sources of financing for all countries. In this context, this study aims to assess the determinants of the tax base of Moroccan foreign trade. The study covers the period from 1990 to 2023. The results of the modeling using the Generalized Method of Moments (GMM) show that GDP per capita has no significant impact, while variables such as exchange rate, free trade agreements, and fiscal policies are key determinants. The value added of the agricultural, industrial, and service sectors reduces tax revenues due to exemptions and the focus on exports or the domestic market. Inflation has a positive effect, but exports and imports have a negative impact due to exemptions and trade agreements. Customs duties paradoxically limit revenues by discouraging trade. Monetary devaluation has mixed effects on taxation, while corruption remains controlled thanks to customs digitalization. These results highlight the need for Morocco to adopt a more balanced tax system adapted to the new dynamics and trends in international trade. The study reveals the importance of diversifying tax resources and the need to opt for optimized management of exemptions granted during free trade agreements. Similarly, tax exemptions granted to certain sectors, such as the agricultural, industrial, and service sectors, limit access to tax revenues and reduce the state's ability to finance its public spending. In terms of importance, this study allows us to visualize and identify the main economic and structural factors that affect the mobilization of foreign trade tax revenues. In addition, the study assesses the impact of economic and tax policies on foreign trade taxation and provides recommendations to public decision-makers to optimize tax revenue collection.

Classification JEL: F14-H20-F13-C51

Paper type:  Econometric Research