Key’s independent foreign trust enquiry sends all the right signals, but will anything be done?

The opposition slighted John Shewan and Andrew little issued an apology for his attacks against him.

Meanwhile John Shewan has delivered his report and the opposition should really be on bended knees, except that he says the rules that Labour brought in under Helen Clark aren’t fit for purpose.

New Zealand’s tax system has been given a fail grade on disclosure by an independent inquiry.

Tax expert John Shewan was appointed to investigate foreign trust disclosure rules following the Panama Papers saga.

Mr Shewan found that “existing foreign trust disclosure rules are inadequate” and recommended disclosure arrangements should be strengthened.

He also found the publicity around the Panama Papers has the potential to cause reputational damage to New Zealand.

Although he was not given access to the Panama Papers themselves, Mr Shewan said: “It is reasonable to conclude that illicit funds are being hidden in New Zealand foreign trusts.”

In what would make a major change to the foreign tax rules, Mr Shewan makes the recommendation that trust beneficiaries need to be declared.

Under current arrangements, the beneficiaries of trusts (the people that receive the money in them) do not need to be declared and are therefore secret.

But Mr Shewan’s recommendation that beneficiaries have to be declared would take out a crucial motivating factor for people wanting to hide money, as they would not be able to hide anymore.  

The report also recommends a register of foreign trusts, searchable only by regulatory agencies.

At his post-Cabinet news conference on Monday, Prime Minister John Key said it was a thorough investigation, and the recommendations look “sensible and well-reasoned”.

“As I said at the time, our tax settings are relatively robust by international standards, but we’re always open to considering changes if they’re warranted.”

Mr Key says the Government will look at putting those changes in place after officials have looked through the findings in detail and report back to ministers. A response is expected in July.

He says the “majority” of recommendations would likely be introduced.

“We can do a better job of streamlining the disclosure of that information and brining it more easily in the public domain.”

He says the changes to the foreign trust rules are part of a larger Government plan to tighten up on tax rules.

Mr Key says any implemented changes would affect the foreign trust industry, “but that’s not our concern”.

Mr Shewan noted foreign trusts are legitimate, and New Zealand’s tax treatment of foreign trusts is appropriate.

It was outrageous that Labour attacked John Shewan. He’s done a great job on this and Labour have much to be embarrassed about.

I wonder, though, if Labour still have a policy, developed over a light ale in the leader’s office, to ban all foreign trusts.

 

-Newshub


Do you want:

  • Ad-free access?
  • Access to our very popular daily crossword?
  • Access to daily sudoku?
  • Access to Incite Politics magazine articles?
  • Access to podcasts?
  • Access to political polls?

Our subscribers’ financial support is the reason why we have been able to offer our latest service; Audio blogs. 

Click Here  to support us and watch the number of services grow.

As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

48%