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Taxpayers can purchase and redeem Tax Reserve Certificates (TRCs) more conveniently through electronic means from September 1(Wednesday).

"The new Electronic TRC scheme is a user-friendly and flexible means for taxpayers to save money for paying tax. It is open to all taxpayers, both individuals and corporations," a spokesman for the Inland Revenue Department (IRD) said today.

Under the scheme, a taxpayer simply should open an individual TRC account with the IRD to record all his purchase and redemption transactions. Application for account opening is free of charge.

The participant can then purchase electronic TRCs regularly either by bank autopay arrangement, ATMs, payment-by-phone, by post or in person. For civil servants and pensioners, they may even opt for the Save-As-You-Earn Scheme as an additional way to purchase TRCs by monthly salary deductions through the Treasury.

"The electronic TRCs will yield interest comparable to bank deposits when they are redeemed for tax payment. They bear simple interest calculated monthly, including part of a month, from the date of purchase to the date of payment of tax," the spokesman said.

"The interest rate is fixed at the time of purchase and the certificates will cease to earn interest after 36 months. It will be periodically reviewed to reflect the latest trend of the prevailing interest rates in the market," he added. The current interest rate for TRCs is 4.5417 per cent.

"Moreover, an automatic tax payment service is provided under the scheme to ensure on-time tax payments. On the payment due date, the TRCs held in a participant's account will be automatically redeemed, with interest earned, to settle his tax liability. The participant will be issued a redemption statement showing details of the redemption."

"This auto payment service will apply to all types of tax payable in the name of the account holder, including Salaries Tax, Profits Tax, Property Tax and Personal Assessment Tax," said the spokesman.

A mid-year statement will also be issued to each participant each year to provide an update of the account balance. The participant may also request for an account statement at any time.

The spokesman said the IRD would stop issuing normal paper certificates with the introduction of the electronic scheme as the former was both resource intensive and not convenient to taxpayers.

"The paper certificates currently held by taxpayers are still valid for future tax payments, but there will be no cross-over arrangement for paper certificates to be converted to electronic ones," he said.

Further information can be obtained by visiting the IRD's web site (http://www.info.gov.hk/ird), or by calling the hotline at 187 8033 (both operative from September 1) .

End/Sunday, August 29, 1999

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