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John Key vs the world

Written By: - Date published: 7:02 am, May 10th, 2016 - 22 comments
Categories: capitalism, class war, International, john key, tax - Tags: , , , ,

John Key says it is “utterly incorrect” that NZ is a tax haven. Someone better tell Wikipedia, as we appear on their page listing tax havens. Somebody better tell sites like taxhaven.biz:

Tax Haven New Zealand

Although New Zealand is said not to be a tax haven there are certain features which make people associate the jurisdiction with tax havens. The fact that the country has offshore services which includes offshore business entities and offshore trust formation tend to qualify New Zealand as a tax haven.

As a tax haven New Zealand has a business structure in place which allows clients to save on corporate and income taxes which are levied on corporations. The New Zealand limited partnership company can be structured to operate as an offshore business entity. An offshore corporation incorporated in New Zealand pays no local taxes if all its earnings are accumulated outside of the country. A New Zealand need not have partners who are citizens of the country.

New Zealand as a tax haven has certain laws which in common with some of the world top tax havens. For example the names and information of the limited partners in a limited partnership is not made public hence providing privacy for these individuals. Privacy is one of the basic characteristics of every tax haven. The Limited Partnership act of New Zealand does not obligate limited partnership companies to file annual audits with the tax authority in the tax haven. The laws obligate the limited partnership top prepare its audits but they do not have to be made public information. …

Someone better tell the media too. Here’s some of the international coverage of yesterday’s Panama Papers NZ tax haven revelations:

USA, Reuters TV: New Zealand Named at Heart of Panama Papers (video)
US, Business Insider: Panama Papers say New Zealand offshore tax haven
China, Xinhuanet: New Zealand government hits back as “tax haven” allegations mount
Dubai, Dubai Eye: Panama Papers reveals New Zealand as tax haven
UK, Sharecast: Panama Papers: New Zealand revealed as a tax haven
UK, LiveCharts: Panama Papers: New Zealand revealed as a tax haven
India, Tehelka: New Zealand new entrant in the list of tax-free havens
Japan, Japan Times: New Zealand prime place to hide money: Panama Papers

Maybe it’s time to stop trying to deny the bleeding obvious. If we don’t want to be perceived as a tax haven then we should stop being a tax haven. The tide is turning:

Tax havens have no economic justification, say top economists

Thomas Piketty and Jeffrey Sachs among signatories of letter urging world leaders at UK anti-corruption summit to lift secrecy

More than 300 economists, including Thomas Piketty, are urging world leaders at a London summit this week to recognise that there is no economic benefit to tax havens, demanding that the veil of secrecy that surrounds them be lifted.

When was the last time 300 economists agreed on anything?

In total 47 academics from British universities, including Oxford and the London School of Economics, have signed the letter, which argues that tax evasion weakens both developed and developing economies, as well as driving inequality.

The signatories state: “Territories allowing assets to be hidden in shell companies or which encourage profits to be booked by companies that do no business there are distorting the working of the global economy.”

To counter this, they are urging governments to agree new global rules requiring companies to publicly report taxable activities in every country in which they operate, and ensure all territories publicly disclose information about the real owners of companies and trusts. …

Ball’s in your court John.

22 comments on “John Key vs the world ”

  1. heather 1

    We are all worrying too much, Judith will be able to put out a good word for New Zealand at the Anti Corruption Conference in London this week. We can leave it to her to reassure the worlds media that we are open for business. Yeah Right!

  2. vto 2

    We are not a tax haven

    NZ was settled peacefully

    South Canterbury Finance qualifies for the bailout

    The sky is not blue

    Grass is not green

    I am not ackshully the Prime Minister

    . . .

    Key is a laughing stock in the world of credibility and integrity

    • Macro 2.1

      Look, Ackshully, at the end of the day, I was wearing a different hat at the time, and where am I going to invest my “blind” trust if we get rid of tax havens?

    • dv 2.2

      South Canterbury Finance qualifies for the bailout

      And Hubbard is named in the panama papers

  3. ianmac 3

    Key said yesterday or in the Weekend that NZ has no international interest in NZ as a Tax Haven or loss of credibility. Rob has just proven that to be untrue. Either Key or his advisers are unable to Google, or they have their eyes wired shut.

  4. Tricledrown 4

    The worlds Media doesn’t see us as a Tax Haven.
    Shonkey kept repeating yesterday.
    Just about every oversea’s newspaper reported NZ became a tax haven after the British Virgin Islands was being investigated.

  5. Richardrawshark 5

    I think key works on the principle if I say something enough that I believe it, everyone else will.

    Now to find the national parties Nuie trusts.

  6. peter h 6

    Not only Key Hoskings Agrees with Key

  7. Observer (Tokoroa) 7

    Secrecy

    The only reason that Bill English’s Treasury allows very wealthy people to establish Trusts, is to provide the wealthy individual with absolute secrecy and anonymity.

    No names are known by Treasury, No beneficiaries. No nothing. The Trust is just a lump of unsourced wealth.

    This suits the free spirits like John Key who do not concede they are obliged to make the source of their money known, or whether it has been taxed.

    It also suits large Corporations to transfer large monies to low tax Nations. Thus avoiding to pay tax in the country in which they grabbed the wealth.

    It is part of the bastardry of Key and English that they impose Tax on the relatively low earnings of Paye individuals, whilst having no intention of applying such complete auditing on non Paye New Zealand residents or on their worldwide dirty friends who “need a bit of secrecy”.

    For PAYE individuals Tax Avoidance and Tax Evasion have identical outcomes. Namely, only Paye people pay proper tax.

    • Jack Ramaka 7.1

      Like the gst increase for the poor meanwhile the wealthy got a tax cut, go figure?

      And the poor people don’t vote in NZ, apathy is leading NZ down a slippery slope.

    • seeker 7.2

      @Observer(T)

      Would this not be why john key was the ideal candidate to chair/head the International Democratic Union of rightwing wealthy, ethics free,
      free spirits like himself.

      He must be their idol as he is mendacious and yet soooo popular and thus can sell anything their possibly shonky characters desire him to unleash upon us.

      Machiavelli would surely have taken this to be one of the masterclasses in his ideology throughout the ages.

  8. save nz 8

    Planet Key strikes again.

  9. Richardrawshark 9

    I find it rude how once some people reach the point of wealth they have private health insurance, and send their Kids to private schools, suddenly tax becomes a thorn in their sides, they get all why should I pay it. Then employ people like fancy accountants to pay less than a beneficiary a year.

    They still use every other service provided to them, hog up our councils with planning permits from pools too extensions.

    Half the conflict is caused by this, thinking outside the box, wouldn’t a future where we set a tax rate for a set of services, and if you use say, private schools and private health you get a slightly lower tax rate?

    IDNK but are we just going to argue about taxes for millennia or what, In 4.5 billion years when the sun runs out of fuel, and starts expanding and the earth starts heating will they still be collecting taxes!.

    • save nz 9.1

      @Richardrawshark – I have the feeling the people using these tax havens have a lot more money to play with that the average rich person in NZ. When you get into the 100m level and billionaires – they probably don’t even use NZ private schools or NZ health care – they are mobile citizens of the world who just flit around making more money using the wealth to keep acquiring more money. What normal businesses pay in tax, they can spend of ‘experts’ and bribes to just keep out competing honest people and honest businesses to make more money.

      How does a business compete with another who does not pay any taxes? It gives the cheats the advantage, they make more money and get more business more power to change the laws to their advantage. If they get too greedy AKA global financial crash, they go to the government for more money and suffer zero consequences (and no doubt had plenty of money stashed away personally). Meanwhile the middle class, poor, and even rich lose their pensions, their houses and their jobs. It is outrageous.

      Neoliberalism is a house of cards. The deck is stacked to the .1% because they are writing the laws, paying the lawyers and lobbying the governments to keep their gravy trains going, no investigations into their activities and write laws to help make stealing for the super rich, sort of, legal and very complicated so they can fight it out for years and pretend they did not know what they were doing was wrong.

    • Draco T Bastard 9.2

      Half the conflict is caused by this, thinking outside the box, wouldn’t a future where we set a tax rate for a set of services, and if you use say, private schools and private health you get a slightly lower tax rate?

      Nope. That actually causes more inequality and poverty as we’ve been learning over the last three decades since the introduction of user pays.

  10. Nick Morris 10

    Key is the bag-man for the neo-liberal money-slosh-round. He will try until it becomes totally impossible to keep this dark-money bolt-hole that he has allowed to fester in New Zealand. His entire political history is entirely consistent in this.

    He won’t fire his “lawyer” who seems to have “misled” him and “misrepresented” him more than once. Meanwhile the industry pretends to want to deal with the scandal.

    I particularly like the “solution” which creates a register of government approved off-shore trust lawyers, as if the lack of support from the government was the problem.

    Another good one is the taxonomy of good reasons for setting up a secret off-shore tax-zero trust in New Zealand…the battered wife trying to invest a few shillings to save herself and her children; the philanthropist working to help people in some corrupt nation, the multi-ethnic partnership battling to pay legitimate taxes in different jurisdictions….

    I think the Caymens might like to handle those ones.

  11. Chuck 11

    Antony Robbins, I looked at the Wikipedia site and could not see NZ listed in the table provided nor the world map? And since taxhaven.biz is in the business of selling IBCs / Trust etc…of course they will talk things up…good for business.

    “John Key says it is “utterly incorrect” that NZ is a tax haven. Someone better tell Wikipedia, as we appear on their page listing tax havens. Somebody better tell sites like taxhaven.biz:”

    I also looked on a site that most here will feel at home on (Anti TTIP, and corporations not paying fair share of tax etc) they also do not think NZ is a tax haven…

    http://www.ethicalconsumer.org/ethicalcampaigns/taxjusticecampaign/taxhavenlist.aspx

    • One Anonymous Bloke 11.1

      The Wikipedia entry changed twice yesterday. NZ was added to and then removed from the list. No doubt both sides will find sources to support their position.

      The last update at EC was last October. Who knows what they’ll think now.

      Call a spade an earth-inverting horticultural device* if you like.

      *Douglas Adams?

  12. McFlock 12

    Interesting.

    Check the revision logs on wikipedia – NZ was added to the list yesterday morning, then removed by someone else yesterday evening.

    Interestingly enough, the FAS document used as source on the list does footnote that some sources used in their research do list NZ and a few other nations as tax havens, so “utterly incorrect” is a bold statement from dunnokeyo – we at the very least seem to be sailing close to the line. And the FAS document is almost a year and a half old, well before the mossack leak.

  13. Interesting it is…. that this govt could in theory be enabling the laundering of money of child pornography and human trafficking rings …

    In which case our NZ Police and Interpol would be hampered in their investigations and immediate freezing of assets and cash … as evidence and to impede their operations…

    Would we really be proud to be a part of that scenario?

    Because that is precisely what can happen in a country with a govt that enables no significant disclosure of just what those businesses do, who is the principal benefactor and just where those principal benefactors and owners of that business reside.

    It is not an issue of the left or the right.

    Something that the fanatical right wing defenders of John Key that lurk on sites such as these constantly try to deflect and morph the issue into.

    It is an issue and extension of open and transparent govt. And an issue of a govt that has the best interests of its people and that of the global community’s best interests at heart also.

    And that means integrity, open honesty and accountability. Something which has not been demonstrated by this govt to date regarding foreign trust laws which – , has had its hand forced purely and simply by the public coming to light of the Panama Papers. .

    • Draco T Bastard 13.1

      It is not an issue of the left or the right.

      Correct. It is an issue of morals and ethical behaviour. Those that engage in this behaviour and those that defend it and those that set up the laws so it is legal have neither.

      • Stuart Munro 13.1.1

        Yup – Key not only fails every ethical test, he’s arrogant enough to try to brazen it out. Adds insult to injury.

        Full neutral criminal inquiry into Panama Papers on top of an IRD audit – let the Swedish fraud squad do it – there’re bound to be prosecutions, and the kiwi cops are just too riddled with Keystone operators like the one who raided Nicky Hager.

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