New Zealand's tax system has been given a fail grade on disclosure by an independent inquiry.
Tax expert John Shewan was appointed to investigate foreign trust disclosure rules following the Panama Papers saga.
Mr Shewan found that "existing foreign trust disclosure rules are inadequate" and recommended disclosure arrangements should be strengthened.
He also found the publicity around the Panama Papers has the potential to cause reputational damage to New Zealand.
Although he was not given access to the Panama Papers themselves, Mr Shewan said: "It is reasonable to conclude that illicit funds are being hidden in New Zealand foreign trusts."
In what would make a major change to the foreign tax rules, Mr Shewan makes the recommendation that trust beneficiaries need to be declared.
Under current arrangements, the beneficiaries of trusts (the people that receive the money in them) do not need to be declared and are therefore secret.
But Mr Shewan's recommendation that beneficiaries have to be declared would take out a crucial motivating factor for people wanting to hide money, as they would not be able to hide anymore.
The report also recommends a register of foreign trusts, searchable only by regulatory agencies.
At his post-Cabinet news conference on Monday, Prime Minister John Key said it was a thorough investigation, and the recommendations look "sensible and well-reasoned".
"As I said at the time, our tax settings are relatively robust by international standards, but we're always open to considering changes if they're warranted."
Mr Key says the Government will look at putting those changes in place after officials have looked through the findings in detail and report back to ministers. A response is expected in July.
He says the "majority" of recommendations would likely be introduced.
"We can do a better job of streamlining the disclosure of that information and brining it more easily in the public domain."
He says the changes to the foreign trust rules are part of a larger Government plan to tighten up on tax rules.
Mr Key says any implemented changes would affect the foreign trust industry, "but that's not our concern".
Mr Shewan noted foreign trusts are legitimate, and New Zealand's tax treatment of foreign trusts is appropriate.
The Green Party says the inquiry echoes what they'd been pushing for since 2012.
"The secrecy and tax-free status of New Zealand foreign trusts have made them an attractive vehicle for tax avoidance and crime, damaging our reputation abroad," co-leader James Shaw says.
"The National Government has consistently defended foreign trusts, with the Prime Minister saying we had 'full disclosure' as recently as two months ago.
"John Key had to be dragged kicking and screaming into a review that, in hindsight, was needed all along," Mr Shaw says.
In April, the Government appointed the former PricewaterhouseCoopers chair to look at the country's foreign trust disclosure rules.
The investigation came in the wake of the Panama Papers leak of millions of documents, which shed light on the use of foreign trusts to help avoid paying the right amount of taxes.
References to New Zealand in the documents numbered in the tens of thousands, which led some, including Labour leader Andrew Little and investigative journalist Nicky Hager, to call the country a "tax haven".
It also led former Revenue Minister Peter Dunne to say there were serious questions about New Zealand's status as a haven. He hoped New Zealand's reputation wouldn't be tarnished forever.
Currently, foreign trusts need to be registered and keep detailed financial and other records, which can be requested by Inland Revenue and passed on to other tax authorities if need be.
Despite appointing Mr Shewan to look at the disclosure rules, the Government remained steadfast that the country wasn't being used to hide money.
But it was open to any suggestions Mr Shewan might make in his report, which was due to come back to ministers by July 30.
At the time it was announced, Mr Little attacked the review, saying the scope of it was too narrow and wouldn't put people at ease about whether the New Zealand tax system is helping the "mega rich".