National could have avoided the international stain on our reputation from the Panama Papers if it had let IRD’s planned review of foreign trusts go ahead three years ago, instead of now belatedly acting because of the Shewan recommendations, says Labour’s Finance spokesperson Grant Robertson.
“While the Government’s decision to accept the Shewan recommendations is positive it is a u-turn from John Key’s insistence that New Zealand’s foreign trust system was world class and had full disclosure.
“The harm caused to our international reputation could have been avoided if then Revenue Minister Todd McClay hadn’t canned IRD’s planned review of foreign trusts ‘to protect our international reputation’, after an intervention from John Key’s personal lawyer.
“John Key has been forced into a backdown. At the time of the Panama Papers stories he said, ‘I think New Zealand can stand quite proudly on the regime that it runs here in terms of disclosure’. Instead John Shewan said, ‘The Inquiry concludes that the existing foreign trust disclosure rules are inadequate’.
“While the recommendations are sound they could go further. The register should be public and made available to our tax partners. This does nothing to assist foreign tax authorities uncover fraud or tax evasion from the global mega-rich using New Zealand foreign trust structures.
“There is also no legitimate reason to delay the money laundering recommendations. Current changes should be merged with the recommendations into a tax bill for 2016. The Government should get on with it.
“While the improvements will help our international reputation it is deeply disappointing that the Revenue Minister of the time caved in to lobbying from John Key and his lawyer. The whole sorry saga could have been avoided,” says Grant Robertson.