Top US lawmaker: aid recipients face sacrifices

Countries that get US aid, such as Pakistan, will have to shoulder more of the burden for their own growth as Washington eyes deep cuts in overseas assistance, a top US lawmaker warned Wednesday. "Greater sacrifice by aid recipients is required to sustain the generosity of the American people," said Representative Nita Lowey, the top Democrat on the House of Representatives Subcommittee that manages US aid flows.
"For example, Pakistan, which receives $1.5 billion per year in civilian aid alone, has one of the lowest effective tax rates in the world," Lowey said in an opinion column in the online politics and public affairs magazine Politico.
"Fewer than 3 million of the 175 million Pakistanis pay any taxes, and tax evasion is particularly high among the wealthy, according to the Carnegie Endowment for International Peace," said Lowey. Her message echoed US Secretary of State Hillary Clinton''s call in September 2010 for the US ally to increase taxes on its wealthiest earners in the wake of devastating floods that did an estimated 9.7 billion dollars in damage.
"It''s one of my pet peeves: Countries that will not tax their elite, who expect us to come in and help them serve their people, are just not going to get the kind of help from us that historically they may have," said Clinton. "Because one of the things that is now happening in Pakistan, and I said this when I was there last year, you cannot have a tax rate of nine percent of GDP (gross domestic product)," she said.
Clinton said Pakistan''s elites pay so little in taxes "it''s laughable" when the country has "such a rate of poverty and everybody is looking to the United States and other donors to come in and help." And Clinton declared during an October visit to Brussels that "it''s absolutely unacceptable for those with means in Pakistan not to be doing their fair share to help their own people" after devastating floods. In November, Pakistan increased income tax on its relatively well off to raise hundreds of millions of dollars with a "Flood Relief Surcharge" and an increase in a special excise duty on non-essential and "luxury items." But its cash-strapped government is under increasing international pressure to introduce tax reforms to raise revenue, avert economic meltdown and meet IMF targets in line with a bail-out package negotiated in 2008.