The Government wants to override privacy laws to supply the US Government with private details about Americans living in New Zealand.
As part of a global tax-dodging crackdown, the US is forcing banks and other financial institutions to hand over the private financial details of US “persons” and companies based overseas.
From July this year, Kiwi banks and insurers will be required to provide US tax authorities with American customers’ contact details, bank account numbers and transaction history.
The move is already deeply unpopular among banks and expat Americans overseas, some of whom have accused the US of “fiscal imperialism”.
In New Zealand, it has left banks stuck between defying the US and breaking domestic privacy laws that protect all New Zealand residents, including Americans.
But now the Government is stepping in with plans to “override” privacy laws to help banks meet the US demands and reduce costs.
And who is complaining about this:
Council of Trade Unions economist Bill Rosenberg said the US’s tax reporting requirements were another example of US interests dictating New Zealand law.
“There is clearly a breach of privacy here.”
It’s amusing to have the CTU defend the rights of US tax evaders. They are the ones that are affected by this. The next time the CTU goes on about people not paying enough tax, we should recall their support for US citizens to be able to evade tax through NZ banks.
A banking source e-mails:
The first thing to point out is that the only people with something to worry about with FATCA are American tax evaders…not the people you’d normally think the CTU would worry about. The actual number of people affected in NZ will be very, very small. If you’re a New Zealander you’ve got nothing to worry about, if you’re an American and you’ve met you tax obligations you’ve got nothing to worry about.
Secondly, it’s not as though the NZ Govt is an outlier in taking these steps. In fact as this site shows http://fatca.thomsonreuters.com/about-fatca/intergovernmental-agreement/ virtually every developed nation is in the process of taking similar steps. The brutal reality is that if NZ does not meet our FATCA obligations the U.S will put us on black list and whack a 30% odd withholding tax on any US transactions by NZ financial institutions – this will cost all NZers. This is why NZ and pretty much every other developed country is meeting its FATCA obligations.
In fact the Government has actively pushed back to protect NZers privacy as much as possible – the Bill is drafted so as to ensure that only bare minimum of data required to meet our FATCA obligations is passed over.
End story is that no one really wants to be doing this but just as in Australia, the UK, Norway, Spain, South Africa, Brazil, Switzerland, Thailand, Russia etc etc we have no choice.
The CTU standing up for the rights of Americans to evade tax. What champions they are.