Explaining is losing: “New Zealand is definitely not a tax haven” – Key

John Key has said that the IRD will be looking into all of the 11.5 million documents that were leaked from law firm Mossack Fonseca, dubbed the Panama Papers.

He says it will take the small team assigned the task some time to sift through the documents given the sheer volume, and they will follow any leads they get from the probe.

“There is an expectation that every New Zealander will pay their rightful share of tax,” Mr Key said at a press conference today.

“In the end if there is a New Zealand individual that comes out of the Panama Papers that hasn’t paid their fair share of tax, they can expect a knock on the door from the IRD.”

Mr Key says the answer is not to simply close all foreign trusts in the country, this may cause flow on effects with companies that operate in partnerships for example.

“It would be a dangerous decision to ban a foreign trust overnight.”

The Prime Minister says foreign trusts are not the issue and that some members of Parliament own foreign trusts.

Oooh, now there’s a shot before the bow.  Because Key won’t just be talking about National MPs.

He says instead the focus should be on if the trust is legitimate — the trust must be declared and it must be paying the applicable taxes it owes.

It may not trip the definition of Tax Haven in the sense of the Seychelles, but I think we can all agree that foreign trusts being used by foreigners to place assets in a New Zealand trust so that the trustors and trustees both are not liable for tax payments in New Zealand nor their own countries of residence is clearly a “device” to avoid paying tax.

The fact this “device” is essentially available to anyone from any country and can be implemented against the internationally recognised and fairly standard trust legislation of many countries, including New Zealand doesn’t mean it is in any way illegal.

It can of course be used to contain assets that were obtained illegally, but then so can normal bank accounts.

New Zealand isn’t a tax haven.  But in politics, it’s not the law that counts, it is perception.   Taking a stance on New Zealand not being used to avoid tax is hard to defend.  It is clearly going on.  It is legal, and we’re not the only ones.

Perhaps calling a review, an inquiry and a bipartisan working party would have been better, especially as Labour would then have to be part of the process where they need to explain why they introduced the law in the first place, didn’t change it, didn’t repeal it, and only now have decided that Key is to blame.

 

– Newshub

 


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  • Hard1

    For our edufucation, the Ethical Consumer’s list of tax havens…NZ is not included.
    http://www.ethicalconsumer.org/ethicalcampaigns/taxjusticecampaign/taxhavenlist.aspx

    • Michelle

      but the Cook Islands are there and so JK must be involved even according to Winnie
      Winnie is hoping for another wine box moment and will niggle from the side lines

  • Rick H

    I see no reason for our IRD to wade through all 11.5 million documents.
    Only 5% of all these trusts relate to New Zealand and/or the Cook Islands in any way.

    Surely, our IRD will only need to wade through around 500,000 documents.

    • Alloytoo

      I think much of the wading will be done by search bots, if IRD has any nous they will outsource it to Google.

  • Vlad

    A problem is that explaining is very difficult. I don’t understand the intricacies of Foreign Trusts and I would warrant that I am not alone.

    I have some confidence that John Key does, and that he and other NZ National and Labour leaders before him have allowed NZ to be positioned in the mainstream of competitively successful but broadly ethical behaviour.

    Now along comes a party driven by anti-capitalist zealots like Matt McCarten, fed by luddite wreckers like Nicki Hager and now led by a mud-throwing attack the bosses union stooge in Andrew Little.

    He will without principle, though in his defence probably without useful knowledge, do anything to smash the bosses.

    Aided by a shallow and frightened mob of underpaid (it is no longer a top career choice) reporters, he will sling mud without regard for the consequences in the hope that he wrecks the Government.

    With what results, if he succeeds in confusing and frightening voters into throwing out the government of this decent, amazingly successful and stable country?

  • sheppy

    I do hope that a bunch of leftests get caught by this, and hopefully before the next election – oh the irony!!!!

    • Annoyed

      They won’t – the names will be vetted by Hager etc.

  • Catriona

    I just had a thought. So all those people bleating on about NZ being a tax haven and how bad it is, please put your hands up if you have ever purchased goods online from overseas in order to avoid paying GST? A form of tax dodging?

  • Alfred12

    I know that Peters barks at every passing car but does anyone know why he appears to hate JK? Jealousy perhaps?

    • zotaccore

      Because he didn’t make it to PM while he was in the National Party. It’s the monkey on his back which will never ever get off.

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