Ghana is expected to issue its first bond for 2016 on Thursday 7, January, 2016.
The bond which is a GHC500 million 3 year fixed rate bond will be the first bond issued by the Bank of Ghana on behalf of government for 2016.
The GB&F gathered that 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.
It 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).
Furthermore, government has announced it intends to borrow about GHC30. 4 billion 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.
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’.
The government has however announced it intends to reverse the tax on interests following heavy bashing from the public.
The Deputy Commissioner, Policy Programs at the Ghana Revenue Autority (GRA), Edward Gyamerah assured that the authority will refund all cash accrued from interest on investment if tax law is reversed.