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PRESS RELEASE

(Source : Government Information Centre)

Interest on Tax Reserve Certificates

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Government Gazette published on January 30, 2003 contains a Legal Notice to the effect that the Secretary for Financial Services and the Treasury has authorized a change in the rate of interest payable on Tax Reserve Certificates. As from February 4, 2003, the new annual rate of interest will be 0.0542% as against the current rate of 0.0583%, that is the new rate will be $0.0045 per month per $100.

Tax Reserve Certificates bear simple interest and interest is calculated monthly (including part of a month) from the date of purchase to the date of payment of tax.

Interest is only credited when certificates are used to pay tax and no interest is due where the principal value of a certificate is repaid to its holder.

The rate of interest payable on Tax Reserve Certificates is periodically revised in line with the market trend. Currently, it is reviewed every month based on the average of the prevailing six-month time deposit interest rates for $100,000 offered by the three note-issuing banks.

The new rate will apply to all certificates purchased on or after February 4, 2003. Certificates which were purchased before February 4, 2003 will continue to earn interest at the rates prevailing on their respective purchase dates. More interest rate information can be found in the Inland Revenue Department website < http://www.info.gov.hk/ird >. The public can also obtain a copy of Tax Reserve Certificate Interest Rate Table from our 24-hour information hotline at 1878 033. What follows is a summary of the interest rates for the past months:-

  for certificates purchased 0.7167% per annum
  on or after April 2, 2002  
  and before May 6, 2002,  
     
  for certificates purchased 0.5812% per annum
  on or after May 6, 2002  
  and before June 3, 2002,  
     
  for certificates purchased 0.2812% per annum
  on or after June 3, 2002  
  and before July 2, 2002,  
     
  for certificates purchased 0.1908% per annum
  on or after July 2, 2002  
  and before November 4, 2002,  
     
  for certificates purchased 0.2308% per annum
  on or after November 4, 2002  
  and before December 2, 2002,  
     
  for certificates purchased 0.0583% per annum
  on or after December 2, 2002  
  and before February 4, 2003; and  
     
  for certificates purchased 0.0542% per annum
  on or after February 4, 2003  
  until further notice.  

This is always subject to the general rule that interest ceases to accrue after 36 complete months.

End/Thursday, January 30, 2003

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