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PRESS RELEASE

(Source : news.gov.hk)

Interest on Tax Reserve Certificates

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Government Gazette published on April 3, 2008 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 April 7, 2008, the new annual rate of interest will be 0.4667% as against the current rate of 1.0500%, that is the new rate will be $0.0388 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 prevailing interest rate for the six-month time deposit below $100,000 offered by the three note-issuing banks.

The new rate will apply to all certificates purchased on or after April 7, 2008. Certificates which were purchased before April 7, 2008 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 187 8033. What follows is a summary of the interest rates for the past months:-

for certificates purchased on
or after June 4, 2007
and before October 2, 2007,
  2.6333% per annum
     
for certificates purchased on
or after October 2, 2007
and before November 5, 2007,
  2.6167% per annum
     
for certificates purchased on
or after November 5, 2007
and before December 3, 2007,
  2.6833% per annum
     
for certificates purchased on
or after December 3, 2007
and before February 4, 2008,
  2.3333% per annum
     
for certificates purchased on
or after February 4, 2007
and before March 3, 2008,
  1.2500% per annum
     
for certificates purchased on
or after March 3, 2008
and before April 7, 2008; and
  1.0500% per annum
     
for certificates purchased on
or after April 7, 2008
until further notice.
  0.4667% per annum

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

Ends/Sunday, April 6, 2008
Issued at HKT 15:00

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