British Prime Minister Rishi Sunak bowed to pressure on Sunday, sacking Conservative Party chairman Nadhim Zahawi, who has come under criticism for his personal tax arrangements.
Sunak ordered his ethics advisers to investigate Zahavi last week after he claimed he had paid the fine as part of a £4.8 million ($5.96 million) settlement with tax officials. Zahavi allegedly failed to declare the dispute with tax authorities.
Zahavi was appointed Chancellor of the Exchequer – Finance Minister – by former Prime Minister Boris Johnson in July last year. He remained in cabinet under Johnson’s successor, Liz Truss, and her successor, Sunak, who made him party chairman.
In a letter to Zahavi, Sunak said that after the investigation was completed, “it became clear that the Ministerial Code had been seriously breached.”
“Therefore, I have informed you of my decision to relieve you from His Majesty’s government.”
Reports of Zahavi’s multi-million pound settlement with tax officials shocked Britons, many of whom are struggling to survive a cost of living crisis.
The opposition Labor Party said Sunak, who came into office promising “integrity, professionalism and accountability at all levels”, should have fired Zahavi when the allegations were first reported this month, rather than trying to buy time by launching an investigation.
Senior Labor MP Bridget Philipson told Sky News the scandal had exposed Sunak as a “weak” leader.
“There’s a foul stench around the Conservative Party,” she said.
Sunak himself has also come under scrutiny over the tax arrangements of his wife Akshata Murthy, the daughter of an Indian billionaire. Last year, Sunak and Murty appeared on the Sunday Times Rich List of Britain’s 250 richest people – the paper estimated their combined net worth at 730 million pounds ($826 million).
Last year, Muthy enjoyed “non-domiciled” status in the UK, which means she can legally avoid paying UK tax on overseas income from her family’s Infosys business group.
Last week he apologized for receiving a second police fine for not wearing a seatbelt during a car ride. During his tenure as chancellor, Sunak was fined by police alongside Johnson for attending a lockdown-breaking party on UK government premises.
In a letter published on Sunday responding to his dismissal, Zahavi said it had been the honor of his life to serve in successive British governments. He made no explicit reference to the results of an ethics investigation into his tax affairs.
“I came to this country fleeing persecution and I don’t speak English. Lord, I built a successful business and served in some of the highest positions in government. I believe there is no other country on earth where my story possible,” the statement read.