Pak politicians taking our taxes, not paying their own: UK minister
30 January, 2013
LONDON: International Development Secretary Justine Greening has defended giving millions in aid to Pakistan amid suggestions the Pakistani politicians were "taking our taxes" while not paying their own.
Pakistan receives more money in aid than almost any other state but a report last December claimed two-thirds of its MPs have not filled out tax returns, including its top rulers.Sir Malcolm Bruce, chairman of the Commons International Development committee, raised fears that Pakistan's approach was "we'll take your money and do what we please".
He asked the secretary of state: "What influence do we have over the Pakistan government? They are taking aid programmes; they are taking our taxes, not paying their own taxes. There are billions of pounds they have got in bank accounts yet they are taking money from the IMF. Everybody collectively says we expect them to do something. They have had plans in the past to raise their tax base, it's gone down, not up".
He added: "To put it at it most negative, are they saying, 'well, we'll take your money and do what we please?"Ms Greening insisted there were short and long-term reasons why increasing investment in Pakistan was a "sensible" move but said the government was not trying to "buy influence".
MPs on the International Development Committee were told that ministers were pressing the Pakistani government to make a raft of reforms, with tax affairs a high priority."At the moment, 70% of Pakistan's MPs are not filing a tax return," Mr Greening said. We know that their tax base is probably one of the smallest in relation to their GDP in the world."
Ms Greening said she wanted to see Pakistan become rated as a "less corrupt country" and improvements on human rights and democracy.But the Tory cabinet minister sidestepped questions over what it would take for the government to end aid to Pakistan.
Asked whether British aid should be conditional on significant reforms, Ms Greening said it was one of the approaches that could be taken but warned against using a "blunt tool".The International Development secretary insisted she had been "very clear" tax reforms must be made and insisted British money went to support projects that are value for money.
"My sense is you would always need to be careful that it wasn't a blunt tool and, therefore, it is not the approach the UK government has taken in relation to our aid," she said."But I think if you really want to make progress, if it was as simple as saying 'we'll give you some aid money, in which case you'll then do this', you would have seen a lot more change on the ground."The Department for International Development officials confirmed the aid budget for Pakistan for 2012/13 is GBP267 million.