FIF Rules + Tax Discussion/query

I haven’t really paid too much attention to these as I didn’t care before, I’ve always known about them. Now that I’m getting to that level I did some research and these are incredibly harsh and straight up BS? Regardless of a year where we lose on investments we would pay tax out of pocket? But technically if you gain more than 5%, do you still only pay tax on the 5%? I understand that you can completely avoid it by staying under 50k cost but just for the knowledge.

Second question, were supposed to be good samaritans and declare this ourselves or would sharesies do this for us automatically? As far as my research goes, people don’t declare it and it isn’t really looked into that deeply. I have no issues with paying tax etc, but this seems like a crazy unfair policy which is punishing people trying to just make a better future for themselves instead of slaving away for eternity, especially because many of my investments, there is no NZ option available.

Lastly, I’ve seen IBKR suggested by many people, does IBKR automatically tax dividends like sharesies or not? As this rules out any ROC income based etf’s for us in NZ which I was looking into.

Sorry for the massive questions, I just found those FIF rules crazy and want to make sure I’m seeing that correctly. We don’t have many options for NZX investments other than basic smartshare etf’s.