Kiwisaver Question

[MikeL]

I have received some information from my Kiwisaver provider about changes to taxation. The leaflet explains about PIEs and PIRs but there's something I don't understand. Can anyone confirm the following?

1. I have to choose a PIR before I know my annual income from all sources including salary and interest on investments.
2. If I guess my income and it turns out that I have underestimated and chosen a lower PIR rate, I will have to pay a penalty.
3. If I overestimate the income the IRD will not refund the overpayment.

I don't want to get involved in a discussion of whether 30% or 21% or whatever is a reasonable tax rate. What I can't really understand is how the IRD can consider the rules, particularly the third point above, to be fair.
Have I interpreted the regulations correctly?

[Oakie]

Pick what you think is correct. At the end of the tax year you do a tax return and any difference is made up either way then. That's my understanding anyway.
I think the thing about IRD not refunding is actually more like IRD don't do a refund unless you put in a return.

[Hoon]

If you don't like unexpected bills then take the safe option and choose the higher rate. As mentioned IRD WILL refund the overpayment if you put in a return.

This early in the game, the difference in PIR on the miniscule amount of interest you'll be earning is negligible.

[MikeL]

Quote from leaflet:

"PIR is a final tax rate so it's important you provide us with your correct rate. Where tax on your share of taxable investment income has been overpaid as a result of providing an incorrect PIR, the overpaid tax cannot be recovered."

???

[Oakie]

Quote from leaflet:

"PIR is a final tax rate so it's important you provide us with your correct rate. Where tax on your share of taxable investment income has been overpaid as a result of providing an incorrect PIR, the overpaid tax cannot be recovered."

???

Then pick the lower rate and be prepared to pay a little at the end of the year.

[pete376403]

"Inland Revenue - it's our job to be fair" remember that old advert?
But after a while they changed it to "Inland revenue - it's our job to be firm"