It has been revealed that authorization to a change in the rate of interest payable on Tax Reserve Certificates in Hong Kong has been given by the SAR's Secretary for Financial Services and the Treasury.
As of February 2, 2009, the new annual rate of interest will be 0.2667% as against the current rate of 0.3667%, which works out at a rate of HKD0.0222 per HKD100 per month.
Tax Reserve Certificates bear simple interest which is calculated monthly from the date of purchase to the date of tax payment.
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 HKD100,000 offered by the three note-issuing banks.
The new rate will apply to all certificates purchased on or after February 2, 2009.
Certificates which were purchased before February 2, 2009 will continue to earn interest at the rates prevailing on their respective purchase dates.
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