The tax expert tasked with reviewing New Zealand's offshore trusts regime has previously been employed by the Government to advise the Bahamas on exempting its financial services industry from taxes.

The Government sent John Shewan, the former chairman of PwC, and former National Party leader Don Brash to the island nation -- which is known for tax haven activity -- in 2014 to advise it on tax changes.

Labour Party leader Andrew Little highlighted Mr Shewan's work in the Bahamas in Parliament today, and questioned whether he was the right person to lead the inquiry into New Zealand's foreign trusts.

Media reports showed that Mr Shewan and Dr Brash recommended to the Bahamas Government that it "zero-rated" the financial services industry.

Mr Little said Mr Shewan was effectively advising the Bahamas, on behalf of the New Zealand Government, on how to preserve its tax haven status.

He said this undermines public confidence in the process to make sure we close any tax loopholes.

"This is not a good look, and this is not right for the review being conducted here," Mr Little said.

In response, Mr Key said he was aware that Government had sent the two consultants to the country, but he was not aware of the details of their advice.

He said that Mr Shewan and Dr Brash were sent to the country at the invitation of the Bahamas Government, which was interested in New Zealand's tax system.

New Zealand First leader Winston Peters has also criticised Mr Shewan's appointment, pointing to his previous roles in advising the Government on tax matters and his involvement in high-profile tax cases.

Today, he highlighted PwC's work with firms which declared large profits in New Zealand but paid minimal tax.

Mr Key defended Mr Shewan's appointment, saying that he was an international expert on foreign trusts and that he was "beyond reproach".

Opposition parties want an independent, overseas expert to lead the foreign trusts review and have called for a broader inquiry than the one proposed by the Government.