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New Zealand tightens trust laws after Panama Papers
[WELLINGTON] New Zealand announced it was tightening rules surrounding foreign trusts on Wednesday after numerous documents in the Panama Papers leak referenced the South Pacific nation.
Officials in Wellington said the changes would improve the disclosure and registration of foreign trusts, as well as strengthening anti-money laundering rules.
"The changes to the foreign trust rules are a matter that the government intends to move quickly on," Finance Minister Bill English said.
The unprecedented leak in April of 11.5 million files from Panama-based law firm Mossack Fonseca revealed how wealthy individuals use anonymous offshore entities to hide their assets.
New Zealand was referenced more than 60,000 times in the documents, according to local media given access to the material before it was made public.
Prime Minister John Key initially dismissed any concerns, saying the Organisation for Economic Co-operation and Development (OECD) gave New Zealand's tax laws "a clean bill of health" in 2013.
However, he ordered a review a few days later after coming under increasing pressure.
The review, released last month, found it was "reasonable to conclude that illicit funds are being hidden in New Zealand foreign trusts".
It said that while it was inaccurate to describe New Zealand as a tax haven, tightening the rules would help maintain the country's reputation for probity.
Under the changes, a database will be set up allowing police and tax officials to search for details of foreign trusts and their beneficiaries.
The opposition Labour Party welcomed what it termed a U-turn on disclosure by Mr Key but said the database should also be open to the public and New Zealand's 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," Labour finance spokesman Grant Robertson said.
New Zealand is part of a 36-nation taskforce set up to share intelligence on combating tax avoidance.
The taskforce met over the weekend in Paris and said in a statement it had made "excellent progress" in identifying taxpayers and their advisers for further investigation.