IRD says 950,000 Kiwis paid too much tax, won't get it back

Inland Revenue (IRD) has revealed that almost one million New Zealanders paid too much tax last year, but they won't receive a refund.

Hundreds of thousands of people are currently on the wrong prescribed investor tax rate (PIR), resulting in about 950,000 people overpaying tax on investments like KiwiSaver.

Those on too high a PIR overpaid by an average of $44 last year. They won't be reimbursed because the IRD says "current legislation" doesn't allow for it.

In contrast, some 550,000 Kiwis have been paying too little tax in the last year because of their incorrect PIR - an average of $80 to $90 per person.

In an attempt to correct the problem, the IRD will begin contacting customers from mid-July to inform them they need to change their PIR to avoid under or overpaying in the future.

Those who have paid too little will be made to stump up the cash. 

"We made a business decision to look forward and not go back," she said in a statement.

"We’ll be working on how we help people to get their PIR right for the future rather than trying to identify errors people may have made in previous years."