Govt backdown on foreign trusts welcomed

The National Government’s about-turn on foreign trusts has been welcomed by the Green Party today in the wake of the Shewan Inquiry that found that foreign trusts were a likely vehicle for tax abuse and need to be opened up with increased disclosure and reporting requirements.

The Green Party has been pushing for similar disclosure measures around foreign trusts since 2012 while the IRD had made repeated attempts to warn the National Government of the risks of them in 2013 and 2014 saying our current disclosure rules were no longer fit for purpose.

“I welcome the National Government’s about-turn on foreign trusts that will lead to greater scrutiny and oversight of this dark industry,” said Green Party finance spokesperson Julie Anne Genter.

“The Shewan Inquiry concluded that foreign trusts were a likely vehicle for tax abuse and needed to be opened up – a position we’ve held since 2012.

“The secrecy and tax-free status of New Zealand foreign trusts have made them an attractive vehicle for tax avoidance and crime, damaging our reputation abroad.

“The National Government has consistently defended foreign trusts, with the Prime Minister saying we had ‘full disclosure’ as recently as two months ago.

“The Prime Minister was wrong to say our foreign trusts have full disclosure. In practice, that was not true.

“This National Government had to be dragged kicking and screaming into a review that was long overdue.

“We now hope the Government moves quickly to implement these promises and commit to a review of the new measures in two years’ time to ensure they are delivering what they promise,” said Ms Genter.

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