Panama Papers report says New Zealand prime place for rich to hide money

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Wealthy Latin Americans are using secretive, tax-free New Zealand shelf companies and trusts to help channel funds around the world, according to a report on Monday based on leaks of the so-called Panama Papers.

Pressure is mounting on Prime Minister John Key to take action after local media analysed more than 61,000 documents relating to New Zealand that are part of the massive leak of data from Mossack Fonseca, a Panama-based law firm.

The papers have shone spotlight on how the world’s rich take advantage of offshore tax regimes.

Mossack Fonseca actively promoted New Zealand as a good place to do business due to its tax-free status, high levels of confidentiality and legal security, according to a joint report by Radio New Zealand, TVNZ and investigative journalist Nicky Hager.

Opposition Labour Party leader Andrew Little said the government must act to “preserve New Zealand’s reputation by shutting down the system that sees our country implicated in a massive global network of tax avoidance.”

The New Zealand government said last month it would begin a review of its foreign trust laws after the Panama Papers highlighted vulnerabilities in its legal framework that made it a possible link in international tax avoidance structures because its foreign trusts are not subject to tax.

Green Party co-leader James Shaw said that review doesn’t go far enough. He called on Key to “stop defending the tax avoidance industry” and demanded a full inquiry.

United Future leader Peter Dunne, who was the ministe for Revenue from 2005 to 2013, called on the government to take action by reviewing its current disclosure rules and broadening its network of tax information exchange agreements.

“These revelations challenge the identity of New Zealand – we do not want to be seen as a country that enables tax evasion,” he said.

Key dismissed concerns that international tax avoidance was rife in New Zealand.

“New Zealand is barely ever mentioned, it’s a footnote,” Key told TVNZ in reference to the Panama Papers.

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