Abstract
Given the importance of entrepreneurship for economic growth, governments worldwide are increasingly focused on implementing policies to stimulate business creation and expansion. The reduction of administrative, regulatory, and fiscal barriers is a key aspect of these policies to support the entrepreneurial ecosystem. In line with this vision, the Moroccan authorities introduced the “self-employed” status in 2014, featuring a simplified tax framework. This chapter aims to explore the perception of self-employed individuals regarding this tax system through a lexicometric analysis of interviews conducted with entrepreneurs using IRAMUTEQ software. This study reveals that while the current tax system offers some advantages, it also has significant drawbacks, including the omission of expenditure in tax calculations, the absence of VAT recovery, and the lack of loss deductibility. In response to these concerns, several tax adjustments are proposed to address the mixed perception of self-employed individuals towards the tax regime.
TopIntroduction
Entrepreneurship, with its pivotal role in driving economic growth and enhancing competitiveness, has garnered significant attention from governments worldwide. Recognizing its significance, policymakers have placed utmost priority on implementing policies that cultivate an enabling environment for entrepreneurial endeavors (OECD, 2008). By reducing administrative, regulatory, and fiscal impediments, these policies aim to unleash the potential of entrepreneurs and stimulate economic development, ultimately leading to job creation and reduced unemployment rates.
In Morocco, these concerns are particularly relevant given the alarming statistics provided by the World Bank, which highlight a significant unemployment rate, especially among the youth (24.95% in 2022), coupled with a sluggish growth rate (1.1% in 2022). Therefore, fostering entrepreneurship in Morocco becomes even more imperative, necessitating a concerted effort to further cultivate the entrepreneurial ecosystem, not only to catalyze economic expansion but also to generate substantial employment opportunities.
To address these challenges, the Moroccan government introduced the “Self-Employed” status in 2014, aiming to encourage labor market access through self-employment and incorporate the informal sector. This initiative not only promotes entrepreneurship but also addresses the critical issue of unemployment by providing individuals with opportunities to create their own businesses and generate employment. By fostering a culture of entrepreneurship and supporting the self-employed, the government seeks to reduce unemployment rates, stimulate economic growth, and create a more sustainable and inclusive economy.
Notwithstanding the exclusion of specific sectors, such as liberal professions and others, from the purview of this regime, it has observed a notable upsurge in its appeal since its establishment. This is substantiated by the consistent upward trajectory in the number of individuals engaged in self-employment, which has undergone a remarkable growth rate of 12.5 times between the years 2016 and 2021 according to The Moroccan General Tax Administration (Figure 1).
Figure 1. Evolution of self-employment in Morocco (2016-2021)
For its advocates, this regime offers a dual advantage. Firstly, it allows for the possibility of engaging in multiple activities. Unlike other statuses (employee, retiree, student, etc.), the self-employed status allows an independent pursuit of an activity not exclusively or alternatively to another status, but concurrently. Secondly, it simplifies administrative procedures, accounting systems, and provides favorable tax treatment (Stevens, 2012).
To establish a conducive fiscal framework for the emerging self-employed sector, the Moroccan tax system has undergone substantial adjustments with the objective of streamlining tax regulations and alleviating the tax burden. This study aims to explore the perceptions of self-employed individuals regarding the taxation applicable to their regime. The primary research question addressed is: What are the perceptions of self-employed individuals regarding the tax system governing their activities?
This research endeavors to explore two fundamental sub-questions:
To what extent have the implemented tax adjustments achieved neutrality for self-employed individuals?
How does the current tax framework facilitate the growth and development of the self-employed sector?
Given the limited research conducted within the Moroccan context on this specific topic, this article aims to contribute to the existing knowledge through a qualitative study. By delving into the perceptions of self-employed individuals, this research strives to provide insights that can inform policymakers in shaping future tax reforms and addressing any potential shortcomings within the current tax system.
Key Terms in this Chapter
Taxation: Refers to the process of imposing levies or charges by the government on individuals, businesses, or properties to generate revenue for public expenditure. It involves the collection of taxes, such as income tax, sales tax, or property tax, based on specific laws and regulations.
Lexicometric Analysis: Is a quantitative method used to study and analyze textual data by examining patterns, relationships, and structures within a large corpus of text. It involves applying statistical techniques and computational tools to extract meaningful insights, such as identifying key terms, measuring word frequencies, and exploring semantic associations. This approach provides a rigorous and systematic way to uncover hidden patterns and trends in textual data for research and analysis purposes.
Fiscal Barriers: Are financial impediments imposed by the tax system that hinder business growth and development. These barriers encompass high tax rates, complex regulations, and administrative burdens.
Tax Framework: Represents the underlying structure and guidelines that govern the imposition and collection of taxes within a particular jurisdiction. It encompasses the legal and regulatory framework that outlines the tax laws, procedures, and policies. A robust and well-defined tax framework is essential for ensuring transparency, accountability, and effective tax administration, thereby promoting economic stability and growth.
Entrepreneurship: Entrepreneurship encompasses the dynamic process of identifying and exploiting business opportunities through innovation, resource allocation, and risk-taking. It plays a pivotal role in driving economic growth, fostering innovation, and creating employment opportunities.
Tax Adjustments: Are strategic modifications made to the tax system to optimize its efficiency, effectiveness, and fairness. These adjustments can include changes to tax rates, deductions, exemptions, and other provisions. Their purpose is to promote economic growth, incentivize desired behaviors, and address any imbalances or shortcomings in the existing tax framework.
Self-Employed Individuals: Are individuals who work for themselves and run their own businesses. They are not employed by any organization or company. They have the freedom to make independent decisions regarding their work and are responsible for managing all aspects of their business.