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Tax system being misused, Dunne says

NZ NewswireNZ Newswire 29/04/2016

A former revenue minister says the Panama Papers show New Zealand's tax system is being used in a way that was never intended to shelter international income.

United Future leader Peter Dunne was revenue minister between 2005 and 2013, under Labour and National governments.

"For the first time, we are having to confront the label `tax haven', and it is uncomfortable," he wrote on Friday in his weekly column.

Mr Dunne says solutions aren't easy and they're not limited to any one country.

"It would be the height of idiocy to believe that New Zealand can simply draw up the ramparts and all the problems will go away," he said.

"In a global environment, with capital flows occurring in the twinkling of an eye, it is just not that simple and any politician who suggests otherwise is simply a liar."

Opposition parties have called for foreign trusts to be banned since the Panama Papers revealed there are nearly 12,000 of them in New Zealand.

The government denies New Zealand is a tax haven but has ordered a review of the laws around foreign trusts, which are legal but can be used to hide income or for money laundering.

Mr Dunne says New Zealand's tax system is generally well-regarded.

"However, there are now clear signs that the comparative simplicity and transparency, under which we have basked for so long, may not be the advantage we once though it was," he said.

"The release of the Panama Papers make it clear that New Zealand's tax system, with its emphasis on self-assessment, is being used in a way that was never intended to shelter various forms of international income."

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