By Patrick Gower
Revenue Minister Peter Dunne says New Zealand isn't a tax haven for wealthy foreigners, despite a 60 Minutes report showing wealthy foreigners dodging Inland Revenue by using trusts here.
While some might call it tax evasion, Peter Dunne describes it as, in his words, “legitimate tax avoidance”, and the Prime Minister backs him.
“I think the term 'tax haven' is a gross exaggeration because it implies illegality, it implies evasion, rather than legitimate tax avoidance,” says Mr Dunne.
Even though the Inland Revenue Department website says tax avoidance is wrong, on this avoidance issue Prime Minister John Key says Mr Dunne has got it right.
“He'll be using the absolutely correct technical term. There's two things, going back to my days at university – tax evasion and tax avoidance,” says Mr Key.
“There's actually quite legitimate business in New Zealand for servicing foreign trusts.”
Mr Key says under the law tax evasion is illegal but tax avoidance is not. Green Party co-leader Russel Norman says that’s not fair.
“The Prime Minister is telling ordinary taxpayers, ‘You pay all the taxes, you pay for the schools and hospitals, and billionaires and the ultra rich don't have to pay tax.'”
Labour Party leader David Shearer also agrees the distinction is a false one.
"Tax evasion, tax avoidance – it’s basically the same thing,” he says.
There are 3 million New Zealanders who pay income tax. Mr Dunne wasn't commenting today, so on behalf of them 3 News asked Inland Revenue for a list of "legitimate tax avoidance measures" like those open to foreign trusts.
So far there has been no response.
source: newshub archive