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Trade openness and tax structure in Morocco: evaluation and impacts

Author

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  • Salhi Salah eddine

    (Faculty of law, economics and social sciences, souissi. mohammed v university in rabat.)

  • Ritahi Oussama

    (Faculty of law, economics and social sciences, souissi. mohammed v university in rabat.)

  • Echaoui Abdellah

    (Faculty of law, economics and social sciences, souissi. mohammed v university in rabat.)

Abstract

In the present work, we seek to empirically assess the effects of trade openness on the Moroccan tax structure. The estimations are covering the period between 1985 and 2019. The results of the modeling using the Two-Stage Least Squares (2SLS) method confirm that the reduction of customs duties has a negative impact on foreign trade revenues, and consequently, on total tax revenues. Also, the reduction in customs duties reduces domestic revenues, notably, value-added tax, and corporate tax. Additionally, it has been shown that not only do the other channels of transmission of trade openness, namely: the liberalization of imports, the promotion of exports, and the variability of the exchange rate, lead to a decrease in trade revenue, but they also bring about an increase in domestic revenue. Finally, the results of the stylized facts and economic modeling allowed us to deduce that the measures taken by Moroccan economic decision-makers to stimulate foreign trade have led to a loss of trade taxes and fiscal injustice.

Suggested Citation

  • Salhi Salah eddine & Ritahi Oussama & Echaoui Abdellah, 2021. "Trade openness and tax structure in Morocco: evaluation and impacts," International Journal of Economic Sciences, European Research Center, vol. 10(1), pages 100-127, June.
    • Handle: RePEc:aop:jijoes:v:10:y:2021:i:1:p:100-127
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Trade openness; Tax structure; Customs duties; 2SLS;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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