Inquiry into foreign trusts must restore NZ’s reputation

The Green Party is welcoming John Key’s U-turn on foreign trusts but is calling for a broader public inquiry to ensure this isn’t a whitewash, the Green Party said today.

“The Prime Minister is in damage control mode over the use (and abuse) of New Zealand’s foreign trust regime, today announcing that he will appoint an independent expert to review New Zealand’s rules around foreign trusts,” said Green Party Co-Leader James Shaw.

“While I welcome the Prime Minister’s U-turn on New Zealand’s foreign trusts, appointing a single tax expert is unlikely to lead to the kinds of reforms we need to protect our country’s reputation.

“Appointing a single expert insider could result in a whitewash.

“Any inquiry into New Zealand’s foreign trusts also needs expertise from the Inland Revenue Department (IRD), transparency and anti-corruption experts, international tax law experts, and an opportunity for public input.

“Any inquiry without IRD input will be meaningless. IRD are at the heart of this issue, having direct oversight over foreign trusts and responsible for information sharing with overseas tax authorities. They first warned the Government about this issue back in 2013.

“Any inquiry without expert input from anti-corruption specialists will similarly be problematic, as a single tax expert will not be expert at protecting and restoring New Zealand’s reputation overseas.

“The Prime Minister needs to move from damage control mode to a meaningful reform of our secretive foreign trust regime.

“John Key spent last week denying there was a problem of very wealthy individuals hiding their assets in New Zealand, when international experts were saying there very clearly is a problem.”

The Green Party has pushing for greater transparency around foreign trusts since 2012. Greater disclosure of the identity of the settlors, their country of residence, the trust’s beneficiaries, and annual financial reporting would help eliminate the abuse of foreign trusts.

 

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