Middle NZ: Gearing up for a tax battle

If you belong to KiwiSaver Inland Revenue might just owe you some money. Photo / File

COMMENT
In June Inland Revenue announced that a grand total of 450,000 KiwiSaver members were in the wrong tax bracket and therefor not paying enough tax.

Mr Neat was one of those that received a letter advising him to go into his bank and check. He did and — yep you guessed it he got a tax bill — and he has to pay it.

Now we find out that nearly 1000,000 of us are paying too much tax and guess what? According to a TV One news story this week there's no way for Inland Revenue to pay it back.

How does that work?

IRD cannot have it both ways. They can't collect debt without paying debt. That's not how our society works.

I'm a huge fan of KiwiSaver. I wish it had been around when I first started work. It's a fantastic way to save and I'm guessing that in the future it will be compulsory and may well be a retirement fund.

So although I think it's a great scheme I don't, like so many people out there, know anything about how it works. I know the basics of course. I contribute to the fund from my wages, my employer contributes, the Government throw in $521.43 once a year on the proviso that you contributed at least $1042.86 annually.

Then my funds are invested and hopefully they make a profit. I've watched my balance go up over the years and I've also seen it go down.

That's about all I know. To be honest I don't even where my money is invested. I know I chose medium risk.

I also have no idea what fees I pay or what tax I'm on.
I don't recall ever being asked to chose a tax bracket when I signed up.

I bet there are thousands of people just like me out there. Every now and then a big envelope arrives in the mail with all kinds of figures about my KiwiSaver. I glance at it, go cross-eyed, put it down to read later. It's then moved to a drawer where it lays until it's time for a clear out.

Not ideal but you see I trust that the people that know about these things will do the right thing by me. After all it is a Government scheme and surely the Government wouldn't rip off hard-working Kiwis.

Perhaps I'm being far too naive and should take control. I'll ring my provider and ask if they can help me.

Then what? If I find out I'm one of the people who has been paying too much tax how do I get it back? If IRD can't find a way to pay the money back what hope do I have. Absolutely none.

It's no wonder the Government have got such a huge surplus at the moment.
Apparently Revenue Minister Stuart Nash is looking into the issue. Good. Let's see some action. Inland Revenue expect us to pay our taxes on time — they need to play by their own rules.

Footnote: I have a brand new garden accessory. It sits right at the front of the property just before the hydrangeas. Not sure who was kind enough to leave it there but I really don't like it one bit. It doesn't really match the house and reminds me of food. Yes you guessed it — it's a shopping trolley. I thought these things were expensive to replace but after two calls to the supermarket it still sits there. Someone suggested I have some fun with it. "Take Mr Neat for a ride." Now there's an idea.

*Linda Hall is assistant editor of Hawke's Bay Today.