Tuesday, April 05, 2016

Fixing the problem

Yesterday we were reminded once again that New Zealand is a tax haven, part of the global money laundering business which facilitates tax cheats, corrupt politicians, terrorists and criminals and allows them to hide their financial activities. John Key seems to think that this is fine, and is willing to prostitute our international reputation as a corruption-free country for $20 million for his corrupt banker mates. Meanwhile, the Greens are pushing for a solution, with a bill to impose a beneficial ownership register on those foreign trusts:

The Green Party will today seek the leave of Parliament to introduce a Member’s Bill that would end the secrecy around foreign trusts in New Zealand, by imposing a registration and disclosure scheme on foreign trusts.

The Income Tax (Foreign Trusts Registration and Disclosure) Amendment Bill would increase transparency by requiring trustees to disclose full information about the settlors, trustees, and beneficiaries of a trust. The IRD would publish this information in an online register.

“Given the immediate risks to New Zealand’s reputation from the foreign trusts scandal, it’s essential that Parliament starts debating this issue as soon as possible,” Green Party Co-leader James Shaw said.

“The Green Party’s Bill puts an end to the legalised secrecy that makes foreign trusts so attractive to criminals and tax cheats.

Its a good idea, but it shouldn't just be trusts we target. Companies and other legal entities can also be used as money laundering and tax evasion tools. Overseas, countries such as the UK are establishing beneficial ownership registers, so that the ultimate owners of legal persons can be identified (and taxed or prosecuted as necessary). New Zealand should join them. To combine this with another issue I blog about, its an issue being addressed by the Open Government Partnership, and would be a very easy commitment to put in our next national action plan. But its simply not on SSC's radar. It should be. If New Zealand prides itself on being a good global citizen, we should not be part of this problem.