Treasury adds £2m to tsunami funds

The Treasury has announced it is donating £2m to tsunami relief organisations to match the VAT paid on fund-raising events and sales.

Following the Boxing Day earthquake and subsequent Indian Ocean tidal wave, ministers pledged to boost aid efforts by paying back any VAT on charitable donations.

HM Revenue and Customs has monitored fundraising activities in order to estimate the VAT collected on events and goods and services sold in aid of the appeal.

"Millions of people and businesses across Britain have shown their compassion and generosity, attending charity concerts, buying charity CDs, and buying other goods and services designed to raise money for the tsunami appeal," said paymaster general Dawn Primarolo.

"In light of this unprecedented response, we are therefore pleased to make this special donation to cover the VAT collected on fund-raising events and sales, so that all the proceeds of fund-raising sales can go to ease the suffering of those people and communities affected by the tsunami tragedy."

In the immediate aftermath of the tsunami, the Department for International Development pledged £50m in humanitarian assistance, while the Treasury provided an additional £25m.

In March, DfID offered an additional £65m of assistance for longer-term reconstruction.

The government said it had also contributed around £40m to European Union assistance efforts, and is paying around £40m to service Sri Lanka's debts to the World Bank through to 2015.