👑 A Queen, a “Sovereign Fund” and the Fine Print: Why Māori Capital Still Pays the Crown

🌫️ At Tūrangawaewae, Queen Ngā wai hono i te pō announced something historic.
💰 A Māori-owned, Māori-controlled investment fund, built from iwi capital alone.

The promise was bold: “Economic independence in our lifetime.”
The crowd cheered, the haka shook, accountants reached for calculators.

But beneath the ceremony lurks a stubborn fact:
⚖️ If this fund is sovereign in spirit, why does it still pay tax to the Crown?

🌍 Whilst foreign sovereign wealth funds who invest in New Zealand get the red carpet tax free treatment.

1️⃣ No sovereign discount

• 🇸🇬 GIC, 🇳🇴 NBIM, 🇦🇺 Future Fund All are exempt under NZ’s double-tax treaties with 0 % withholding on dividends and interest..

💡 The reason is that under international law, state entities are immune from tax.

👉 Māori funds, however ancient the whakapapa or collective the asset, are not the Crown.

• NZ companies pay them dividends and 15–30 % is withheld.
• The same dollar that leaves Wellington untouched for the Norwegians is clipped for Waikato.

2️⃣ The Māori Authority rate: misunderstood

📰 Headlines often highlight the “special 17.5 % rate.”
But here’s the catch:

• It applies only when the fund distributes cash to iwi shareholders.
• It is a rebate mechanism to align investor tax with household rates.

Inside the fund, nothing changes:

• 28 % on rental income, bank interest, or offshore dividends
• 5 % Fair Dividend Rate (FDR) on global equities, even if those shares lose value

📌 The 17.5 % is not a holiday. It is just an adjustment at the very end of the chain.

3️⃣ The bigger picture: Sovereign in name, taxed as local.

🌱 This fund is not just a balance-sheet project. It is a Treaty claim in financial form.

It says: “We will build our own kāinga of capital. But we should not be penalised for not being the Crown.”

Every 28 % cheque to IRD reminds Māori investors that rangatiratanga and kāwanatanga still diverge.
Even when both sides want Māori wealth to grow, the tax code whispers otherwise.

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📜 The Queen has spoken; the Crown still invoices.