Key: Foreign trusts not the problem

Key: Foreign trusts not the problem

John Key has said that the IRD will be looking into all of the 11.5 million documents that were leaked from law firm Mossack Fonseca, dubbed the Panama Papers.

He says it will take the small team assigned the task some time to sift through the documents given the sheer volume, and they will follow any leads they get from the probe.

"There is an expectation that every New Zealander will pay their rightful share of tax," Mr Key said at a press conference today.

"In the end if there is a New Zealand individual that comes out of the Panama Papers that hasn't paid their fair share of tax, they can expect a knock on the door from the IRD."

Mr Key says the answer is not to simply close all foreign trusts in the country, this may cause flow on effects with companies that operate in partnerships for example.

"It would be a dangerous decision to ban a foreign trust overnight."

The Prime Minister says foreign trusts are not the issue and that some members of Parliament own foreign trusts.

He says instead the focus should be on if the trust is legitimate -- the trust must be declared and it must be paying the applicable taxes it owes.

"New Zealand is definitely not a tax haven."

Labour Party leader Andrew Little disagrees. He says foreign trusts should be banned altogether. He said on Q+A he can't see the value in them.

"I cannot see what the purpose is, apart from allowing citizens in other countries to avoid their tax responsibilities in their home countries. And I am at the point now where I am saying, actually, unless I can be convinced otherwise, we should just get rid of them," Mr Little said.

A database of information from the Panama Papers is due to be released in a searchable digital format on Tuesday NZT at 6am titled: "The Revolution Will Be Digitized".