Govt should stop foreign trusts operating secretly in NZ

The Government must stop allowing the foreign trust industry to operate in secret here to prevent New Zealand becoming a tax haven for criminals, the Green Party said today.

New Zealand foreign trusts have again been implicated in money laundering, tax avoidance, and criminal activity following a massive document leak from a Panamanian law firm Mossack Fonseca. The documents reportedly show that New Zealand is being used by overseas investors to keep tax secrets.

“New Zealand is today being described as the ‘quiet little achiever’ as a tax haven for criminals,” Green Party finance spokesperson Julie Anne Genter said.

IRD warned the Government in 2013 about the high risks of New Zealand foreign trusts yet National has ruled out any reform to date. In an email dated March 24, 2016, IRD said, ‘In relation to the foreign trust tax rules, given wider Government priorities the Government will not be considering regulatory reform of the rules at this stage.’

“Up until now, the National Government has been happy to allow New Zealand to become a significant tax haven,” said Ms Genter.

“New Zealand's foreign trusts form part of a trillion dollar tax haven industry highlighted by a document leak from Panamanian law firm Mossack Fonseca.

“It’s time to break open our foreign trust industry to help fight global tax evasion.

“Our foreign trust laws are unsustainable. IRD has suspected this for years, and now needs to be empowered with simple, new transparency and record-keeping rules to keep the foreign trust industry here honest.

“How can we as a country work collaboratively with other countries to try and clamp down on tax avoidance by multinational companies while knowingly facilitating tax avoidance through our lax foreign trust laws?

“It's time to demand some transparency from our foreign trust regime.”

The Green Party will move to require foreign trusts in New Zealand to register and disclose more complete information on the identity of the settlors, their country of residence, related parties, and require annual financial reporting. This would enable real-time information sharing with those 40 countries New Zealand currently has double tax agreements with.

Latest Finance Announcements

Story

Tax the banks

Instead of creating an appeal fund and one-off lotto draw, the Labour Government could tax the billions of dollars banks have made in unearned, exc...
Read More

Story

Urgent action needed to support families

 The tools exist to help families with surging costs – and as costs continue to rise it is more urgent than ever that we use them, the Green Party ...
Read More

Story

BPS constraints risk impacting low income people the most

The Government will constrain itself unnecessarily at Budget 2023 unless it changes the tax system to raise revenue from the wealthiest few which c...
Read More

Story

Case for excess profit tax on banks clearer than ever

The Government should adopt an excess profits tax and use any revenue raised to help people make ends meet, following the rise in the Official Cash...
Read More

Story

Tax excess profits, don’t leave it to the good will of large corporations

The Green Party is once again calling on the Government to introduce an excess profits tax and use the money to support people, rather than relying...
Read More

Story

RBNZ report strengthens case for excess profit tax and more income support

A drop in household income from rising bank interest rates further demonstrates the need for an excess profits tax, the Green Party says.
Read More