Morocco plans further incentives to curb informal sector

Morocco plans to introduce subsidies to help small companies leave the informal sector, employment minister Younes Sekkouri said.

The aid consists of 10000 dirhams to subsidize rent payments of small companies to help them integrate the formal sector, Sekkouri said.

Sekkouri deplored that 70% of Moroccan entrepreneurs are operating in the underground economy.

He also mentioned the limits of the self-entrepreneurship scheme which has enrolled 540,000 entrepreneurs, but only 60,000 were regularly paying their taxes.

The government is also mulling taking care of backoffice of self-entrepreneurs and small enterprises.

The scale of the informal sector in the Moroccan economy amounts to 30% of GDP said a new study conducted by the Central Bank.

The informal economy leaves workers in vulnerability without pension or health insurance and undermines the economy due to tax and anti-competitive practices.

The coronavirus pandemic has revealed the scale of the underground economy which showed that 5 million households, representing more than half the Moroccan population, depend on informal economic activity without social protection.

Nearly 3 million jobs are threatened by the informal production units which have the advantage of low production costs, according to Morocco’s employers’ association CGEM.