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PRESS RELEASE

(Source : Government Information Centre)

Interest on Tax Reserve Certificates

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The Government Gazette published on April 30, 2004, contains a Legal Notice to the effect that the Secretary for Financial Services and the Treasury has authorised a change in the rate of interest payable on Tax Reserve Certificates. As from May 3, 2004, the new annual rate of interest will be 0.0171% as against the current rate of 0.0100%, that is the new rate will be $0.0014 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 May 3, 2004. Certificates which were purchased before May 3, 2004, 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 < www.ird.gov.hk >. 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 on
or after June 2, 2003
and before August 4, 2003,
  0.0500% per annum
     
for certificates purchased on
or after August 4, 2003
and before September 1, 2003,
  0.0417% per annum
     
for certificates purchased on
or after September 1, 2003
and before November 3, 2003,
  0.0375% per annum
     
for certificates purchased on
or after November 3, 2003
and before February 2, 2004,
  0.0250% per annum
     
for certificates purchased on
or after February 2, 2004
and before March 1, 2004,
  0.0150% per annum
     
for certificates purchased on
or after March 1 2004
and before May 3 2004; and
  0.0100% per annum
     
for certificates purchased on
or after May 3, 2004
until further notice.
 
  0.0171% per annum

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

Ends/Friday, April 30,2004

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