NZ govt open-minded about tax law changes

The government doesn't want other countries to see New Zealand as a tax haven and has an open mind about changes that could be made to tighten up the system, Finance Minister Bill English says.The government is under pressure from opposition parties to close loopholes which they say make New Zealand a tax haven for foreigners who set up trusts there.

The issue is whether the trusts are being used to hide money and avoid taxes in other countries, something that's been thrust into the public arena by the huge leak of documents from a Panama-based bank that sets up the trustsThey reveal the existence of 214,000 trusts in more than 200 countries, and New Zealand is one of them.Inland Revenue has confirmed there are more than 11,000 foreign trusts in New Zealand.

Mr English says New Zealand is regarded internationally as having a comprehensive, broad-based tax system.There are probably fewer holes in our tax system than any other country," he told reporters on Wednesday.We're quite open-minded about changes that can be made to tighten it up appropriately, if that's what's required, but that's yet to be tested in detail.We don't want other countries seeing us as a tax haven  we don't believe that's a correct characterisation of what goes on here.Mr English says it's "not really obvious" what significant changes could be made.

That would be what we'll get advice on."The government says detailed information is held about foreign trusts set up here, which can be shared with other jurisdictions if they ask for it and if there's a double tax agreement in force.IRD says it also shares information proactively if it comes across "dubious activity".

Labour and the Greens say the trusts are effectively secret, because tax authorities in other countries don't know the identities of the people operating them so can't ask for information.Labour leader Andrew Little wants an inquiry to assess the scale of the issue in New Zealand, but the government says that's not necessary.