31 Jan 2018

NZ's financial transparency ranking improves

12:15 pm on 31 January 2018

New Zealand's international ranking as a financially transparent country has improved slightly in a newly published report.

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Photo: 123RF

The Financial Secrecy Index is published by the Tax Justice Network, a group which campaigns for open financial dealings, and ranks countries on issues such as banking secrecy, the ability to dodge taxes, hide assets, launder money, and whether they co-operate internationally.

The index also takes into account countries' share of the global finance industry.

The survey is one where the lower the ranking the better you are judged to be.

"Secrecy jurisdictions are a safe haven for the world's dirty money. Kleptocrats, tax evaders and multinationals engaging in tax trickery all abuse secrecy jurisdictions," Liz Nelson, a director at the Tax Justice Network, said in a statement.

New Zealand is ranked number 58 out of 112 countries and territories in the latest survey compared with 54 in the 2015 survey.

The modest improvement comes after moves to clamp down on the use of New Zealand based foreign controlled trusts which were criticised as being open to hide assets and dodge tax.

The previous government's move to implement the Shewan inquiry recommendations - including demand for details of the beneficiaries of such trusts and information sharing with other jurisdictions has resulted in a large reduction in the number of trusts operating here.

New Zealand's commitment to clamping down on tax avoidance by multinational companies and signing up to anti-money laundering and counter terrorism financing agreements is also supporting the rating.

The top spot - the least transparent country with the most holes for money to escape through - was retained by Switzerland, followed by the United States which has been steadily climbing up the rankings in recent years.

"Switzerland is the grandfather of the world's tax havens, one of the world's largest offshore financial centres, and one of the world's biggest secrecy jurisdictions or tax havens," the report said.

The top 10 included well known tax havens - the Cayman Islands, Luxembourg and the Channel Island of Guernsey.

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