BRITAIN?S overseas aid?effort?should focus on helping poor countries collect their own taxes so they become less dependent on UK ?taxpayers, a report out today says.

A cross-party committee of MPs says a reliable flow of cash from income, sales, property and?company?taxes, offers developing nations a much better way out of ?poverty than handouts from Britain or other countries.
It urges the Department for International Development and HM Revenue and Customs to help ensure that unofficial workers and unregistered?businessesare brought into tax systems in countries that receive aid.
Governing ?elites? and multinational corporations should also pay ? and be seen to pay ? their fair share.
Britain?s aid spending is set to rise from ?12billion this year to ?14billion in 2014 to meet international targets, after DfID was spared the austerity cuts wielded on most other departments.
International Development Committee chairman Sir Malcolm Bruce said: ?The aim 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, for the countries concerned and for UK taxpayers.? The committee?s report was welcomed by TaxPayers? Alliance chief executive Matthew Sinclair.
He said: ?Helping poorer countries in receipt of British aid to ensure a stream of?income?from their own people will certainly reduce the burden on the British taxpayer in the longer term.?
The committee said countries where tax systems were improved would probably be run more efficiently as their people would be more likely to hold politicians and ?governments to account.
An average 13 per cent of the output of developing countries is collected in tax, compared with 35.4 per cent in wealthier nations.
Personal income taxes also tend to contribute much less than trade-based levies.
The MPs said British-based corporations should be made to publish accounts for operations in developing countries to reduce cross-border tax evasion.
Mining companies extracting vast amounts of ores and minerals should be taxed on volume or turnover as this was harder to evade than taxes on profits.
A Government spokesman said it had already helped Rwanda boost its tax revenues six-fold in a decade.
He said ministers remained committed to helping developing countries secure sustainable revenue sources and they would respond to the committee in due course.
Source:?Alison Little


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