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Govt `more than happy' to change trust law

NZ NewswireNZ Newswire 10/04/2016 By Peter Wilson and Sarah Robson

The government will be "more than happy" to change the rules around foreign trusts if it's shown there are better ways to handle them, Prime Minister John Key says.

The government on Monday appointed former PricewaterhouseCoopers chairman John Shewan to independently review disclosure rules in the aftermath of the Panama Papers leak.

He's being given a clear run and he'll report back by June 30.

"We will look for his recommendations and implement them," Mr Key said at his post-cabinet press conference.

"If there are things we can do better, if there are improvements that can be made, the government is under no illusions - we will be more than happy to make those changes."

The leak of 11.5 million documents from Panama-based law firm Mossack Fonseca revealed the existence of 214,000 foreign trusts and companies set up in more than 200 countries.

New Zealand is one of them, reported to be mentioned 60,000 times in the documents.

Inland Revenue has confirmed that more than 11,000 trusts have been set up here, and opposition parties are accusing the government of allowing the country to be used as a tax haven.

While foreign trusts have many legitimate purposes, they're also used for tax avoidance and money laundering.

Mr Key is continuing to insist New Zealand is nothing like a tax haven and says IRD shares foreign trust information with dozens of countries, often proactively.

"I was talking to a top tax official over the weekend, he said it can't be possible for New Zealand to be ranked in the top 20 countries of the world in terms of compliance in this area and people to still claim it's a tax haven," he said.

"And look at the BBC's listing the top 10 tax havens in the world - we're nowhere near them, I think the United States was number three but New Zealand wasn't anywhere near it."

Mr Key again pointed to 40 double-tax agreements and 11 information-sharing agreements New Zealand has with other countries.

Opposition parties have welcomed the review but maintain there's still a need for a full-blown inquiry - something the government has dismissed.

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