The Government Gazette published today (June 2)
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. From June 6, 2022, the new annual rate of interest will be 0.1333 per cent against the current rate of 0.05 per cent, i.e. the new rate will be $0.0111 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 12-month time deposit for $100,000 to $499,999 offered by the three note-issuing banks.
The new rate will apply to all certificates purchased on or after June 6, 2022. Certificates purchased before June 6, 2022, will continue to earn interest at the rates prevailing on their respective purchase dates. Below is a summary of the interest rates for the past periods:
|For certificates purchased on or after||0.2333 per cent per annum|
|May 4, 2020, and before June 1, 2020:|
|For certificates purchased on or after||0.2000 per cent per annum|
|June 1, 2020, and before December 7, 2020:|
|For certificates purchased on or after||0.1500 per cent per annum|
|December 7, 2020, and before April 7, 2021:|
|For certificates purchased on or after||0.1167 per cent per annum|
|April 7, 2021, and before May 3, 2021:|
|For certificates purchased on or after||0.0833 per cent per annum|
|May 3, 2021, and before June 7, 2021:|
|For certificates purchased on or after||0.0500 per cent per annum|
|June 7, 2021, and before June 6, 2022:|
|For certificates purchased on or after||0.1333 per cent per annum|
|June 6, 2022, until further notice:|
This is always subject to the general rule that interest ceases to accrue after 36 complete months.