The Shewan inquiry has found that foreign trusts are open to being abused and has recommended new disclosure requirements in line with what the Green Party has been pushing for since 2012, the Green Party said today.
The Government Inquiry into Foreign Trust Disclosure Rules found today that existing foreign trust disclosure rules are inadequate and has recommended a significant increase in the information required for disclosure at set-up and on a yearly basis.
“The Shewan inquiry into foreign trusts has concluded what the Green Party has been pushing for since 2012: foreign trusts are a likely vehicle for tax abuse and need to be opened up with increased disclosure and reporting requirements,” said Green Party Co-leader James Shaw.
“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 National Government was wrong to say our foreign trusts have full disclosure. In practice, that was not true. IRD warned the Government in 2013 and again in 2014 that our disclosure requirements were not fit for purpose, but it took the Panama Papers leak and significant public pressure to finally get National to move.
“John Key had to be dragged kicking and screaming into a review that, in hindsight, was needed all along.
“Shewan’s findings are a win for greater transparency around tax matters and for honest politics internationally.
“We hope the Government moves quickly to adopt all these recommendations and put in place a review of how the new measures are working in two years’ time.
“IRD intimated in 2014 that our foreign trust regime might not be sustainable in the long term so we need to revisit the effectiveness of any new disclosure requirements to ensure they are delivering what they promise,” said Mr Shaw.