Top US lawmaker says Pak faces cut in aid unless it drastically increases tax rates

Washington, Feb 10(ANI): US aid beneficiary nations, such as Pakistan, will have to shoulder more of the burden for their own growth as Washington eyes deep cuts in its overseas assistance, a top US lawmaker has warned.

"Greater sacrifice by aid recipients is required to sustain the generosity of the American people," the Daily Times quoted Representative Nita Lowey, the top Democrat on the House of Representatives Subcommittee that manages US aid flows, as saying.

"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 Politico.

Her message echoed US Secretary of State Hillary Clinton's call in September 2010 for Pakistan to increase taxes on its wealthiest earners in the wake of that year's devastating floods that caused an estimated 9.7 billion dollars worth of 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," she added.

Clinton said Pakistan's elites paid so little in taxes that "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".

In October 2010, she declared during her 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 the unprecedented floods.

Pakistan's cash-strapped government is under increasing international pressure to introduce tax reforms to raise its revenue, avert economic meltdown and meet the targets set by the International Monetary Fund in line with a bailout package negotiated in 2008. (ANI)