Foreign aid strategy should focus on tax collection, MPs say
Description: Roadside shop in Lahore, Pakistan
Pakistan has shown the way by boosting its tax take by a quarter in the past
year
The UK should give more priority to helping the poorest countries collect
their taxes as part of its foreign aid strategy, MPs have suggested.
The Commons International Development Committee said dependable tax revenues
were a far better route out of poverty than reliance on overseas aid.
In a report, it said supporting more efficient tax collection represented
"excellent value" for UK taxpayers.
The UK spent £7.8bn on aid in 2011 and this is set to rise to £11bn by 2015.
The government welcomed the report and said it was "firmly committed to
helping developing countries access more sustainable sources of revenue".
Amid cuts in other departments, the foreign aid budget is being protected to
help the UK meet its target of spending 0.7% of national income on aid by
2013.
The cross-party committee said an efficient and transparent tax system was
of "fundamental importance" to a country's economic and social development.
Tax havens
It urged ministers to support the authorities in developing nations to
improve the collection rates of income tax, VAT and local property taxes and
to ensure governing elites paid their fair share.
"If developing countries are to escape from aid dependency, and from poverty
more broadly, it is imperative that their revenue authorities are able to
collect taxes effectively," the committee's chairman, Lib Dem MP Malcolm
Bruce said.
"The aim of development work is to enable developing countries to escape
from over-reliance on aid.
"Supporting revenue authorities is one of the best ways of doing this: it
represents excellent value for money, both for the countries concerned and
for UK taxpayers."
In their report, the MPs expressed concern that recent changes to tax rules
affecting UK-owned companies operating exclusively abroad could make it
easier for them to use tax havens and reduce their tax liability in
developing countries.
Aid agencies have estimated this could cost developing countries billions in
lost tax revenues and the committee said the government should consider
reversing the changes "as a matter of urgency".
"The government is committed to supporting economic growth in developing
countries to reduce their dependency on aid. While this is clearly the right
thing to do, it would be deeply unfortunate if the government's efforts were
undermined by its own tax rules," Sir Malcolm added.
Ministers should introduce rules requiring companies to publish financial
information on a country-by-country basis to discourage cross-border tax
evasion, the report said.
A government spokesperson said: "The Committee is right to praise British
aid for helping poor countries to boost their tax systems and help them to
pull themselves out of poverty by investing in schools, hospitals and
infrastructure.
"We will consider the detailed recommendations carefully and will produce a
formal written response in due course."
Thé Mulindwas Communication Group
"With Yoweri Museveni and Dr. Kiiza Besigye Uganda is in anarchy"
Kuungana Mulindwa Mawasiliano Kikundi
"Pamoja na Yoweri Museveni na Dk. Kiiza Besigye Uganda ni katika machafuko"
<<image001.jpg>>
_______________________________________________ Ugandanet mailing list [email protected] http://kym.net/mailman/listinfo/ugandanet UGANDANET is generously hosted by INFOCOM http://www.infocom.co.ug/ All Archives can be found at http://www.mail-archive.com/[email protected]/ The above comments and data are owned by whoever posted them (including attachments if any). The List's Host is not responsible for them in any way. ---------------------------------------
