Haiti single tax 'will aid victims'

Stars including Robbie Williams sang on February's hit record
12 April 2012

Aid efforts in other countries will not be hit by a decision to "waive" VAT on a Haiti earthquake charity single, Downing Street has insisted.

Prime Minister Gordon Brown pledged to make sure the tax from sales of the star-studded hit would go to victims of January's disaster in a bid to boost sales. Aid agencies were alarmed however when it emerged the bill for the lost revenue was being paid initially by the Department for International Development.

Political opponents accused Mr Brown of a "sleight of hand" after The Independent reported disquiet among DfID officials at the arrangement. But Downing Street insisted the arrangement was procedural and that the aid budget would be fully reimbursed by the Treasury.

Number 10 said the VAT had to be collected under EU law but that all the promised proceeds would go to Haiti and no other development efforts would suffer.

"The story is wrong. No money raised for Haiti will be deducted from other development projects or the DfID budget," it said in a statement.

DfID would reimburse the initial cost of the VAT but had an agreement with the Treasury that "they will provide additional end-of-year financing to cover that cost".

"There will therefore be no impact at all on other areas of DfID's work or budget."

More than 200,000 people were killed when impoverished Caribbean republic Haiti was hit by a magnitude 7.0 quake in January.

The single, a cover of REM song Everybody Hurts, was masterminded by pop and TV mogul Simon Cowell and sold more than 600,000 copies. Proceeds were split between the Disasters Emergency Committee (DEC) and The Sun newspaper's Helping Haiti campaign.

Oxfam, which had raised concerns about the impact on aid elsewhere, welcomed the assurance from Downing Street.

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