Legal loopholes in New Zealand's tax system will be "tightened up", the government says, following revelations Auckland's Denton Morrell is managing a network of companies that may be assisting businesses to launder money.
Photo: RNZ / Cole Eastham-Farrelly
Commerce and Consumer Affairs Minister Kris Faafoi told RNZ's Morning Report there needed to be more transparency about who owned companies registered in New Zealand.
"I don't want to act with undue haste. I think what we have to remember is that the kinds of loopholes people take advantage of are there because sometimes we do act with haste."
This follows revelations that Auckland company Denton Morrell is helping to manage a network of New Zealand-registered businesses and trusts for clients which may be used by international money launderers.
That was revealed as part of the Daphne Project, an series of investigations by a group of local and international media groups following up stories covered by Daphne Caruana Galizia, a Maltese journalist who was killed by a car bomb while investigating government corruption and money laundering.
"There needs to be more transparency and things need to be tightened up." - Commerce and Consumer Affairs Minister Kris Faafoi
Denton Morrell had been compliant with investigations so far, Mr Faafoi said.
The investigative journalist Nicky Hager told RNZ yesterday that while foreign trusts were subject to a government crackdown in 2016, not enough of the rules were changed.
Mr Faafoi said the government would seek public submissions on legislation around the New Zealand Companies Register.
"As a general principle, we are worried that there is a need for more transparency, especially around the beneficial ownership of companies."
The team charged with monitoring companies was "a very good team but it's a small team" so its resources may need to be increased.
"I think you've always got to be vigilant and make sure you have the right kinds of resources to be able to keep an eye out for this thing," he said.
A large number of businesses on the register were small New Zealand-based companies and the government would ensure there was no "burden of compliance" for these.
In a related story, the three men accused murdering Maltese journalist Daphne Caruana Galizia - killed by car bomb in October while investigating government corruption and money laundering - must stay in prison until their trial.
The trio have pleaded not guilty, and their lawyers argued they should be freed until a date for their trial is set. The court rejected the request, citing the seriousness of the crime, protection of public order and a risk that the accused might commit other crimes.