(1) The Principal Act is amended -
(a) in section 256(1) in the definition of "appropriate tax" -
(i) in paragraph (a) by substituting "23 per cent" for "20 per cent",
(ii) by substituting the following for paragraph (b):
"(b) subject to paragraph (c), in the case of interest paid in respect of any other relevant deposit, at a rate determined by the formula
(S + 3) per cent
where S is the standard rate per cent (within the meaning of section 4(1)) in force at the time of payment, and",
and
(iii) in paragraph (c), by substituting "(S + 6) per cent" for "(S + 3) per cent",
(b) in section 261(c)(i) by substituting the following for clause (II):
"(II) where the taxable income of that person includes relevant interest which comes within paragraph (b) of the definition of 'appropriate tax' in section 256(1) of the Principal Act, the part of taxable income, equal to that relevant interest, shall be chargeable to tax at the rate at which tax was deducted from that relevant interest.",
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