New Zealand is under investigation by the EU as it prepares a blacklist of global tax havens, Newshub revealed on Monday night.
The grouping of 28 European nations has compiled a list of countries with lax tax laws. Following the release of the so-called Panama Papers, it has confirmed that New Zealand is under investigation.
The EU is our third largest trading partner and worth about $7000 for every person in New Zealand.
The EU loses around NZ$1 trillion to tax havens each year, and it intends to put a stop to the practice by threatening a raft of sanctions against countries that don't comply to its standards.
New Zealand doesn't comply, even when the recommendations made by tax expert John Shewan as a result of the Panama Papers are included.
The latter point is important. While National is adopting all the recommendations of the Shewan inquiry, that inquiry was a strapped chicken aimed at protecting the status quo. As a result, those changes don't go nearly far enough. The EU wants us to tax these trusts, to automatically exchange their information with other tax authorities, and to establish a public register allowing citizens to uncover corruption. These all seem like a good idea. And if it drives the foreign trust industry out of business, even better - because we neither need nor want that sort of corrupt industry in New Zealand.