NZ could be international financial centre in 10-15 years - taskforce
The Switzerland of the South Pacific? A government task force says it's possible, and could generate billions.
Acting Economic Development Minister David Carter says the government has considered recommendations on how to enhance New Zealand as an international financial services centre. But from his comments, it seems those wanting a Switzerland of the South Pacific will have to make do with incremental tax changes already introduced, or already before parliament.
The recommendations are outlined in a report by the International Funds Services Development Group (IFSDG), a taskforce established by Cabinet last year.
“The report shows that New Zealand could be a viable funds domicile – essentially a centre for funds accounts and administration – in around 10 to 15 years,” Mr Carter said.
“This could generate around $500 million to $1.3 billion per year in export revenue and create around 2000 to 5000 high-value jobs, such as accountants, lawyers and trustees.”
The IFSDG recommended that establishing New Zealand as a financial services centre would require clarification of existing tax policy, establishing the regulatory conditions necessary for a funds domicile and obtaining broad support.
Mr Carter says the government is making some tax and regulatory changes that will make it easier for overseas firms to domicile their funds in New Zealand.
“Changes to the PIE tax rules to allow foreign investors to pay a zero percent tax rate on their foreign-sourced PIE income are included in the Taxation (Tax Administration and Remedial Matters) Bill 2010 currently before Parliament. This is consistent with New Zealand’s source-based approach to taxation, which generally taxes non-residents only on the income they earn from New Zealand. The growth of the financial services export industry will also be considered in all future regulatory changes.”
Craig Stobo, Chair of the IFSDG, said he is pleased to see tax and regulatory changes going ahead.
“The tax changes are a critical step towards establishing a financial services centre in New Zealand. We also note the regulatory changes that are being implemented by the government and are encouraged by New Zealand’s involvement in discussions within APEC on a possible regional multi-lateral mutual recognition agreement for managed funds.”
The rull report is online here.
NBR staff
Tue, 03 May 2011
Tue, 03 May 2011
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NZ could be international financial centre in 10-15 years - taskforce
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