New Zealand is not a tax haven, says the man who reviewed the country's foreign trust regime in the wake of the Panama Papers document dump.
That conclusion, just one from the 136-page review which former PwC chairman John Shewan released yesterday, could well be seized upon by Prime Minister John Key and Revenue Minister Michael Woodhouse. Both had earlier rubbished claims that this country fitted that description when it was labelled a tax haven by the group of journalists that sifted through the 11.5 million records leaked from Panama law firm Mossack Fonseca.
Shewan's view, however, should be of cold comfort to the pair, particularly because he says it doesn't mean the Government can sit on its hands.
"The fact that New Zealand is not a tax haven is not a basis for leaving the foreign trust disclosure rules as they are," he said.
Shewan says the "significant debate" over whether New Zealand should be labelled a tax haven is a good illustration of why the Organisation for Economic Co-operation and Development doesn't favour the term anymore.
"In the context of a 21st century global economy it is wholly inadequate. Debates that focus on it tend to be futile in throwing light on the core issues or resolving them, as has been the case in New Zealand ... as a classification, tax haven is an ambiguous label that is now only of historic relevance and is best not used as a basis for decision making without much deeper inquiry," he said.
What should be of more relief to Key, Woodhouse and the rest of us, is Shewan's view that New Zealand's international reputation has emerged relatively unscathed from the Panama Papers episode.
Although he believed local views of New Zealand's tax system likely dipped because of the tone of Panama Papers reportage, Shewan did not think New Zealand had slipped in the eyes of the world.
Shewan said New Zealand had a strong reputation within the OECD and elsewhere as a country "with integrity that is committed to clamping down on crime, money laundering, terrorist financing, the hiding of illicit funds, tax evasion and aggressive tax practices".
"The Panama Papers and associated debate concerning foreign trusts are unlikely to have any significant impact on that reputation, particularly if action is taken to tighten disclosure rules," he said.
Woodhouse yesterday afternoon confirmed the Government will make changes in light of Shewan's inquiry, which described the existing disclosure rules around foreign trusts as "inadequate" and "light-handed".
As a result of the changes, foreign-owned trusts based in New Zealand will be required to disclose more information when registering and file annual returns.
In 2013, Inland Revenue warned the rules around foreign trusts may need to be strengthened to "protect our international reputation".
At least this time round, the Government appears to be listening.