Tax expert picked for foreign trust review
Former PwC chairman John Shewan has been appointed by the government to conduct a review of disclosure rules covering foreign trusts registered in New Zealand.
Millions of leaked documents from Panamanian law firm Mossack Fonseca, released last week, show how the world’s elite set up tax shelters to hide their wealth, including in New Zealand.
Finance Minister Bill English said, in light of the so-called Panama Papers, it was worth looking at whether the disclosure rules were fit for purpose and whether there were practical improvements that could be made.
“As we’ve said, we’re open to considering changes to disclosure rules if that is warranted.
“So we’ve asked Mr Shewan to take a thorough and independent look at the current regime to check that it’s fit for purpose”.
The terms of reference include reviewing foreign trusts’ disclosure rules as they apply to record-keeping, enforcement and the exchange of information with other tax jurisdictions.
According to LinkedIn, Mr Shewan was the chairman of PwC New Zealand from 2003 to 2012, during which time he was heavily involved in tax policy and practice.
Mr Shewan chaired the government’s Tax Education Office from 1988 to 1998.
He appears to be based in Wellington, and is an independent director for a range of industries, including insurance, banking, wine, dairy investment, sports administration and education.
Mr Shewan has been asked to report back to ministers by 30 June.
‘New Zealand’s reputation has been sullied’
Labour leader Andrew Little said the government had been slow off the mark on the controversy.
“It’s taken the government a week to realise what every other New Zealander knows, that harbouring tax dodgers in New Zealand is simply not acceptable.”
Mr Little said the review was not something that should be carried out behind closed doors with a single expert.
“That’s not going to help at all, we now have this massive dump of information that’s gone worldwide, New Zealand’s reputation has been sullied and we need a response that actually is open and transparent.”
When asked if he had ever used offshore tax account for investments, Prime Minister John Key said he had had a superannuation fund in Singapore, the country he lived in at the time. But Mr Key said he had never used tax shelter companies.
Mr Little said it was a legitimate question to ask politicians, particularly in light of the difficulties UK Prime Minister David Cameron was facing.
When asked if he had ever had any connection to a trust registered in a country other than New Zealand, Mr Little said he had not.
The Green Party also wanted a broader public inquiry. Co-leader James Shaw said Prime Minister John Key was now in damage control.
Mr Shaw said appointing a single tax expert was unlikely to lead to the kind of reforms needed to protect New Zealand’s reputation and could result in a “whitewash”.
He said any inquiry needed expertise and input from the Inland Revenue Department (IRD), transparency and anti-corruption experts, international tax law experts and an opportunity for public input.
“Any inquiry without IRD input will be meaningless,” Mr Shaw said.
“IRD are at the heart of this issue, having direct oversight over foreign trusts and responsible for information sharing with overseas tax authorities. They first warned the government about this issue back in 2013.”