24 Dec 2009

Govt happy with bank tax outcome

9:48 am on 24 December 2009

The Government is happy with the outcome of a long running tax dispute involving New Zealand's top trading banks.

The BNZ, Westpac, ASB and ANZ National have all agreed to settle with Inland Revenue.

It follows a court battle over financial transactions deemed to have no value other than to avoid tax.

The banks will pay a combined total of $2.2 billion, about 80% of what they originally owed in tax and interest.

Revenue Minister Peter Dunne told Morning Report he believes a good deal has been struck.

He said $1.4 billion has already been included in the Government's accounts following earlier court rulings.

BNZ chief executive Andrew Thorburn told Morning Report, that the IRD has accepted the discounted figure in order to avoid prolonging the case.

He described the deal as good value for the taxpayer.

The deal is described as the largest commercial settlement in New Zealand history.


Earlier this year, Westpac was found to have avoided payment of tax worth more than $960 million. Under the settlement it will pay about $865 million.

The BNZ was also found to have avoided tax and says it has paid $658 million which is 80% of the full amount of tax and interest.

ASB says it will pay $264 million and ANZ National nearly $414 million.

The payments will end any legal action.

[audio:http://www.radionz.co.nz/audio/national/mnr/2009/12/24/four_banks_accept_ird_liability_of_$2.2_billion]Listen to more on Morning Report