When pastures on the other side get brown (Part II)

In the British Parliament on August 23 2012, Members of Parliament urged their government ministers to do more to ensure that recipients of British aid money do more to collect their own taxes properly.

The Commons International Development Committee said if poorer nations collected their own taxes effectively, they would not have to rely on British taxpayers quite so much.

Take note of the same language of Bellingham, but conveyed in the Commons using different semantics.

The MPs said a reliable flow of tax revenues offered countries a far better route out of poverty than reliance on foreign aid donations.

The MPs urged the Department for International Development (DfID) to support the revenue authorities in developing nations to improve the collection rates of income tax, VAT and local property taxes.

While most government departments have had to endure severe cuts, DfID is enjoying increases to take its budget up to 0.7 per cent of GDP.

Committee chairperson Sir 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,” said Bruce.

Any difference in rhetoric to Bellingham’s? Ignore that at owner’s risk.

The committee said it was essential that the governing ‘elites’ within developing countries paid – and, critically, were seen to pay – the correct amounts in personal taxation.

“Tax is an issue of fundamental importance for development,” its report said.

“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.”

But the MPs said efforts to improve tax collection were hampered by new Treasury rules for multinational companies which give them an incentive to shift profits into tax havens.