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PRESS RELEASE

(Source : Government Information Centre)

Interest on Tax Reserve Certificates

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Government Gazette published on May 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 June 2, 2003, the new annual rate of interest will be 0.0500 as against the current rate of 0.0542, that is the new rate will be $0.0041 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 June 2, 2003. Certificates which were purchased before June 2, 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 1878033. What follows is a summary of the interest rates for the past months:-

for certificates purchased   0.5812% per annum

on or after 6 May 2002 and
before 3 June 2002,
 
   
     
for certificates purchased   0.2812% per annum

on or after 3 June 2002 and
before 2 July 2002,
 
   
     
for certificates purchased   0.1908% per annum

on or after 2 July 2002 and
before 4 November 2002,
 
   
     
for certificates purchased   0.2308% per annum

on or after 4 November 2002 and
before 2 December 2002,
 
   
     
for certificates purchased   0.0583% per annum

on or after 2 December 2002 and
before 4 February 2003,
 
   
     
for certificates purchased   0.0542% per annum

on or after 4 February 2003 and
before 2 June 2003; and
 
   
     
for certificates purchased   0.0500% per annum

on or after 2 June 2003
until further notice.
 
   
     

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

End/Friday, May 30, 2003

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