The United Kingdom has warned Pakistan to modernise its failing tax system or risk losing part of a 1.4 billion-pound aid programme funded by British taxpayers.
Whitehall officials urged the Pakistan government to raise more of its own revenue and stop allowing 99 per cent of the country's citizens to avoid paying income tax altogether, reports Express.co.uk.
Britain's soaring hand-outs to the country - set to become the biggest recipient of UK aid - remained "under review", officials said.
The row erupted after claims that 300 million-pound aid from the UK was being used to "make friends and influence people" in an election campaign.
Matthew Sinclair, of the Taxpayers' Alliance, said taxpayers will rightly be concerned over questions of whether their cash is being spent on political campaigning abroad.
The aid budget is meant to help the world's poorest, not fund Pakistani politicians' point-scoring, he added.
Pakistan is on course to become the biggest recipient of UK aid, around 450 million-pound a year, by 2015. Yet the country has been frequently criticised for having one of the smallest tax bases in the world. (ANI)