14 Apr 2016

Tax reviewer allegations a 'storm in a teacup'

5:56 am on 14 April 2016

The Labour Party is not resiling from its latest attempt to discredit the man appointed to carry out a review of foreign tax rules, John Shewan.

In Parliament, Labour leader Andrew Little accused Mr Shewan - appointed to review the rules on foreign trusts - of giving the Bahamas advice to preserve its status as a tax haven.

Prime Minister John Key asked Mr Shewan and Don Brash to go to the Bahamas in 2014 to advise that country on introducing a goods and services tax.

John Shewan

John Shewan Photo: SUPPLIED

Mr Shewan said they provided tender advice about GST, but absolutely rejected the accusation it had anything to do with the Bahamas' international tax status.

Since the review was announced on Monday both Labour and New Zealand First have been questioning the suitability of Mr Shewan to carry out the review, mainly because of his close association with the financial services industry.

Mr Little said the Bahamas advice cast doubt on Mr Key's judgment in appointing Mr Shewan to carry out the review.

Mr Little was asked what evidence he had, other than a newspaper article from the Bahamas.

"I can go on the reports that we have got, the government here has set up a review of our foreign trusts regime, but that review is being conducted by somebody who is now associated at the very least with advice to the Bahamas, a well known tax haven who following that advice has sought to preserve their tax haven status."

More on foreign trust rules in New Zealand

  • Review could change NZ trust laws
  • Who is John Shewan?
  • Is NZ a tax haven or a safe haven?
  • Mr Little made no apology for his comments about Mr Shewan.

    "John Shewan is a highly competent tax specialist and tax expert.

    This is about John Key's judgement, this is about his decision-making. He and his cabinet made the decision to appoint John Shewan to do a review into this area that is causing a lot of consternation amongst a lot of New Zealanders."

    Mr Shewan said he was not letting the political attacks get in the way, and was focused on doing the job requested of him.

    Andrew Little, John Key and James Shaw

    Andrew Little, left, John Key, middle, and James Shaw Photo: RNZ

    "I've advised a number of governments over many years - Labour, National, international governments - political parties, including parties like the Greens on the way I would suggest they formulate tax policy.

    "My interest is in good tax policy and practice, not politics. I'll leave politics to the politicians."

    The allegation he made recommendations to protect the Bahamas' status as a tax haven was totally wrong, he said.

    "This is a complete red herring, a storm in a teacup and very disappointing.

    "I would have been more than happy to take a call from Mr Little's office to respond rather than people going off on the basis of what would seem to be a completely misleading newspaper article from the Bahamas."

    Green Party co-leader James Shaw said he did not see anything untoward about Mr Shewan's trip to the Bahamas.

    "Well I've been very careful not to target John Shewan personally, and I don't think that somebody like that should be caught up in the political shenanigans.

    "I think the really important thing here is to focus on what does the public need in order to have trust in the credibility of the review that's been undertaken."

    Mr Shaw said Mr Shewan was obviously a tax expert, but it would be good to have a broader group doing the review.

    Don Brash

    Don Brash Photo: ACT Party

    Don Brash, a former leader of the National and ACT parties, said he thought the move could be political and it was a shame Labour was making false accusations.

    "I think he has a reputation for great integrity. He was for what, 10 years, chairman of the PwC accounting practice and I don't think anyone has ever accused him of being corrupt or any way biased, on his advice on tax."

    Mr Key continued to back the appointment of Mr Shewan, saying he was a very well regarded expert in his field, which was needed for a review of a very complex part of the law.

  • Trust reviewer rejects Bahamas accusation
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  • Who is John Shewan?
  • PM 'prepared to change foreign trust rules'