Government To Issue 500 Million Cedi 3 Year Bond Today

Government will today, Thursday 7th January, issue its first bond for 2016. The bond which is a 500 million cedi 3 year fixed rate bond will be the first bond issued by the Bank of Ghana on behalf of the government for 2016. Following the implementation of the new income tax law the bond will be subject to the 1 percent tax on interest earned by individuals. Earlier, the Bank of Ghana announced ‘all payments in respect of the bonds by or on behalf of the Issuer shall be subject to withholding or deduction for, or on account of taxes, expect that, in relation to nonresident Bondholders, the Issuer agrees to pay such additional amounts as may be necessary in order that the net amounts received by such non-resident bondholders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Bonds in the absence of the withholding or deduction’. Government has, however, announced it intends to reverse the tax on interests following heavy bashing from the public. Speaking on Citi FM’s consumer show, Business Today, Deputy Commissioner, Policy Programs at the Ghana Revenue Authority (GRA) Edward Gyamerah said the authority will refund all cash accrued from interest on investment if tax law is reversed. Meanwhile, proceeds from the bond is to be used to restructure government debt and also for maturity settlement. The bond will be available to both resident and nonresident investors. The bond will also be listed on the Ghana Stock Exchange (GSE) for secondary market trading both at the floor of the Exchange or over the counter (OTC). Meanwhile, government has announced it intends to borrow about 30. 4 billion cedis, in the first half of this year, through bonds, treasury bills and notes. The move will see government borrow 4 .72 billion cedis in January 2016 alone.