Seth Terkper, Finance Minister
Government is expected to pay 25.5 percent as interest on the three-year bond sold on Thursday.
The bond, which was sold by the Bank of Ghana (BoG), got GH¢419 million worth of bids from investors, although it wanted to raise GH¢400 million.
However, government accepted GH¢207 million worth of bids by investors.
The bond, which was opened to offshore and local investors, was the second in a series planned for this year and is meant partly to roll-over maturing debts and also to finance projects.
The 25.5 percent for yesterday’s three year bond is the highest in recent times after borrowing at around 23 percent for a similar bond issued in February this year.
The development could mean that commercial banks might not be able to lend to individuals who want to borrow over a three-year period below 25 percent.
In another development, Government has announced that it has reached an agreement with commercial banks for the VAT on financial services not to be charged on salaries, savings, deposits, investments, interests or loans.
The tax is to affect only fees or commissions that are charged on some financial services as in the provisions of the 2013 Act 870.
June 1, 2014 will be the commencement date for the implementation of Act 870 on financial services whilst all stakeholders dedicate next month to intensive public education campaign on implementation of the tax.
These were contained in a statement from the Finance Ministry following an emergency meeting held on Thursday, April 24, 2014 on the implementation of VAT on financial services.
The Finance Ministry, Ghana Revenue Authority (GRA) and the Ghana Association of Bankers participated in the meeting.
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