Estimating Optimal Level of Taxation for Growth Maximization in MOROCCO

Abstract

: What is the optimal tax burden rate that maximizes economic growth in Morocco? To tackle this matter, this article aims to model the optimal tax rate in Morocco during the period 2000-2019, by using Scully’s model. The results of the estimation show that tax revenue around 23.4 percent of GDP maximizes the growth rate. It is very lower than the actual applied rate (27%). This situation reveals that Morocco is situated in the prohibitive side of Barro’s curve and the taxation is “unnecessary” and even degrading for growth and competitiveness.