Impact of Trade Liberalization on Tax Revenue Mobilization: Case of Morocco Impact of Trade Liberalization on Tax Revenue Mobilization: Case of Morocco

RÉSUMÉ Le présent travail chercher à explorer la relation entre l’ouverture commerciale d’un pays et le niveau de ses recettes fiscales et budgétaires. La revue de littérature montre qu’il n’y a pas de consensus quant à la relation entre la libéralisation commerciale et les recettes fiscales d’un pays. ce papier fait appel à une estimation économétrique par l’estimateur des doubles moindres carrés, traitant une série chronologique pour la période 1985-2019. Lesrésultats montrent que le Maroc ne profite pas pleinement de sa libéralisation, en effet lasignature des ALE et le manque de compétitivité des exportations impact négativement lesrecettes fiscales du Maroc, suite à la réduction voire même la suppression des droits dedouane. Ainsi ce constat, oblige le pays à trouver des solutions à travers des réformescommerciales et fiscales dans le but de remédier aux effets négatifs de la libéralisation par lacompensation des pertes douanières à travers des politiques de transition fiscale. Mots clés : Libéralisation commerciale ; Recettes fiscales ; Accords de libre-échange ; Droits de douane. Abstract This work seeks to explore the relationship between the trade openess of a country and the level of its fiscal and budgetary revenues. To verify this relationship, we focus on the case of Morocco. This paper uses an econometric estimation by the two-stage least squares estimator, dealing with a time series for the period 1985-2019. The results show that Morocco does not take full advantage of it liberalization. Indeed, the siging of FTAs and the lack of export competitiveness negatively impact Morocco’s tax revenues, following the reduction or even the abolition of customs duties. Thus, this observation obliges the country to find solutions through trade and tax reforms in order to remedy the negative effects of liberalization by compensating for customs losses through tax transition policies. In order to analyze the budgetary implications of trade liberalization in Morocco, the estimation technique used in this paper is based on the Two-Stage Least Squares (2SLS) estimator. This estimate is adopted for the Moroccan case with a period ranging from 1985 to 2019. The results suggest a negative relationship between trade liberalization, measured by the index of openness represented by the volume of imports and exports as a percentage of GDP, and total tax revenue. The impacts of the variables are significant in our regression equations, and the signs of the coefficients are similar to those obtained by Khattry and Rao (2002). However, the results suggest that the share of tax revenue in GDP increases with the advancement of the level of urbanization, income per capita, contrary to the conclusion of Khattry and Rao (2002). For the Moroccan case, the results of the regression confirm that the relationship of the structure of tax revenues is strongly positive with GDP per capita (statistically significant), unlike internal taxation and exports and imports which influence it negatively. These results can be explained by the orientations of the public authorities which seek to stimulate foreign trade (signing of free trade agreements, dismantling of tariffs, etc.), as well as social and economic changes (2008 economic crisis and the Arab spring) that the country's main trading partners had and which negatively impacted the volume of foreign trade in terms of imports and exports.