The inclusion of a capital gains tax hike in Morocco’s 2008 budget is designed to increase government revenues in order to subsidize the rising cost of commodities on global markets. The tax rise, from the 10% rate introduced last year, to 15%, has caused some disquiet. Leading many in the capital markets sector to claim it will stifle small investors, who have recently shown increased interest in the stock market. The sell-off in the immediate aftermath of the announcement suggests that these fears may have some foundation. However, in the medium term, the Casablanca Stock Exchange (CSE) looks set to remain dynamic. Many initial public offerings (IPOs) of recent years have been hugely oversubscribed, and 2007 was no exception. There was not a great deal of parliamentary enthusiasm for the tax rise, with fewer than half of lawmakers turning out for the vote, and 96 voting in favor and 67
