XN000022-1973-10-26 — Page 9

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Friday, October 26, 1973

HIGHER INTEREST ON TAX RESERVE CERTIFICATES

The rate of interest payable on tax reserve certificates will

be increased from 4.2 per cent to 5.7 per cent, tax free, as from next

Thursday (November 1).

Commenting on this today, the Commissioner of Inland Revenue,

Mr. F.E. Rainbow, explained that interest on tax reserve certificates

was calculated in monthly steps and the new rate will be 47 cents per

month for every $100.

**The

"Interest will be credited as before in respect of completed

months between purchase and surrender in payment of tax," he said.

new rate will be paid in respect of each month completed on or after

November 1, 1973."

Citing an example, he said the interest on a $1,000 certificate

bought on April 26, 1973 and surrendered in payment of tax on January 3, 1974,

would be calculated on the following basis:

April 26 to October 25, 1973

six complete months at $3.50 per month

$21

October 26 to December 26, 1973

two complete months at $4.75 per month ...

$9.50

$30.50

Mr. Rainbow explained that 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 in cash.

Interest also ceases to accrue after 36

completed months without surrender for payment of tax.

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