Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

New Zealand's Turn For The Worse On Financial Transparency

New Zealand, along with Japan, has made the largest turn for the worse between 2018 and 2020 among 133 countries on the Index of Financial Security released today by the Tax Justice Network. The change is in the Index's category of Integrity of Tax and Financial Regulation.

This is entirely because of change on the indicator of Consistent Personal Income Tax. This measures whether a personal income tax scheme is comprehensive in scope, defined as uniform and compete, including capital gains. This no doubt reflects their judgment on New Zealand's abandonment of progress towards a capital gains tax.

The Tax Justice Network's Financial Secrecy Index 2020 shows that the Cayman Islands have overtaken the United States and Switzerland as the countries most complicit in helping individuals to hide their finances from the rule of law.

Reforms to New Zealand law since the publication of the Panama Papers in 2016 have improved New Zealand's reputation for financial transparency, and incidentally resulted in the removal of thousands of foreign trusts from the New Zealand registry as disclosure requirements were tightened by legislation. Overall, New Zealand earns a financial secrecy score of 59 out of 100, with 100 being full secrecy.

Tax Justice Aotearoa believes New Zealand could make further significant steps towards improved financial transparency by taking the following measures:

  • requiring public disclosure of details concerning those who own or derive benefits from trusts
  • ensure that the owners and beneficiaries of trusts are liable for tax on trust distributions where this is appropriate
  • require global corporations to place in the public realm enough information to assess whether or not they are avoiding tax, known as public country-by-country reporting.

Tax Justice Aotearoa also supports the option proposed by the Ministry of Business, Innovation Employment in its 2018 discussion paper that beneficial ownership information of corporate entities is included on the registers with public access.

The improvements in financial transparency in the 2017 law changes were only established in New Zealand as a result of the leaking of information provided to activist journalists. Details of ownership, beneficial rights and possible tax dodging should not have to depend on the actions of whistle -blowers. Awareness of public disclosure should also act as an incentive to trust owners and beneficiaries to behave responsibly.

New Zealand is ranked at 57 out of 133 countries, with a score of 59

The Financial Secrecy Index ranks each country based on how intensely the country's legal and financial system allows wealthy criminals to hide and launder money extracted from around the world. The Index grades each country's legal and financial system with a secrecy score out of 100 where a zero out of 100 is full transparency and 100 out of 100 is full secrecy. The country's secrecy score is then combined with the volume of financial activity conducted in the country by non-residents to calculate how much financial secrecy is supplied to the world by the country.

A higher ranking on the index does not mean necessarily a jurisdiction is more secretive, but rather that the jurisdiction plays a bigger role globally in enabling secretive banking, anonymous shell company ownership, anonymous real estate ownership or other forms of financial secrecy, which in turn enable money laundering, tax evasion and huge offshore concentrations of untaxed wealth. A highly secretive jurisdiction that provides little to no financial services to non-residents, like Samoa (ranked 86th), will rank below a moderately secretive jurisdiction that is a major world player, like Japan (ranked 7th).

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Infrastructure Commission: Te Waihanga Releases Report On Water Infrastructure

The New Zealand Infrastructure Commission, Te Waihanga’s latest discussion document highlights the importance of current reforms in the water sector. Its State of Play discussion document about water infrastructure is one of a series looking at the ... More>>

Sci-Tech: Perseverance Rover Lands On Mars – Expert Reaction

NASA has landed a car-sized rover on the red planet to search for signs of past life. The vehicle has more instruments than the four rovers preceding it, and it’s also carrying gear that could help pave the way for human exploration of Mars. The ... More>>

ALSO:


ASB: Quarterly Economic Forecast Predicts OCR Hike As Early As August 2022

Predictions of interest rate rises have been brought forward 12 months in ASB’s latest Quarterly Economic Forecast. Chief Economist Nick Tuffley now expects the RBNZ to begin raising the OCR from its current level of 0.25% as early as August ... More>>

Real Estate: House Price Growth Rates In Hawke’s Bay Skyrocket Ahead Of Rest Of New Zealand

Hawke’s Bay is leading the property ‘pack’ proving a post lockdown land of milk and money, continuing to outstrip the rest of the country with the highest annual growth rate in house price values. But experts warn an overheated market is fast ... More>>

ACT: Matariki Almost A Half Billion Dollar Tax On Business

“Official advice to the Government says an extra public holiday at Matariki could cost almost $450 million,” ACT Leader David Seymour can reveal. “This is a perfect example of the Prime Minister doing what’s popular versus what’s responsible. ... More>>

Genesis: Assessing 6,000 GWh Of Renewable Generation Options For Development By 2025

Genesis is assessing 6,000 GWh of renewable generation options for development after starting a closed RFP process with 11 partners. Those invited to participate offer a range of technologies as Genesis continues to execute its Future-gen strategy to ... More>>

OECD: Unemployment Rate Stable At 6.9% In December 2020, 1.7 Percentage Points Higher Than In February 2020

The OECD area unemployment rate was stable at 6.9% in December 2020, remaining 1.7 percentage points above the level observed in February 2020, before the COVID-19 pandemic hit the labour market. [1] In December, the unemployment rate was also stable ... More>>

Stats NZ: Unemployment Drops To 4.9 Percent As Employment Picks Up

The seasonally adjusted unemployment rate dropped to 4.9 percent in the December 2020 quarter, from 5.3 percent in the September 2020 quarter, Stats NZ said today. Last quarter’s unemployment rate of 5.3 percent followed the largest increase observed ... More>>