Friday, March 29, 2024

BoZ removes withholding tax on government bonds

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Bank of Zambia
Bank of Zambia

BANK of Zambia (BoZ) has removed withholding tax on the discount income for government securities to promote the development of secondary market in debt obligation.

Discount bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity.

The central bank also says the public and all investors in government securities are further reminded that the withholding tax shall still be deducted from coupon interest earned.

“We wish to remind the public and all investors in government securities that with effect from January 1, 2016, the withholding tax on the discount income for government bonds will no longer be deducted on all existing and new issues.

“This measure is meant to stimulate the development of secondary market in government bonds,” BoZ says in the public notice availed to the Daily Mail recently.

The BoZ says individuals and corporate institutions are eligible to participate in the primary auctions of government bonds.

Currently, the central bank issues government bonds in six maturity categories namely; two, three years, five, seven, 10 and 15 years.

7 COMMENTS

  1. That was the case in the late 90 and early 2000’s. Legislation was passed to introduce withholding Tax and now back to square one. “Blind leading the Dead” or “Dead leading the Blind”

    • This is typical PF: create a problem in the first place and then claim wise leadership on reversing the stoopidity. Compare with electricity tariffs, forex controls and excise duty on clear beer. There’s nothing to thank PF for. They created the problem in the first place because they are broke.

    • It is indeed progress. His Excellency and PF are clearly demonstrating that they have understood the causes of the last major recession that nearly destroyed the world economy.
      @Sido Marks is being a little unfair.
      It’s not a bad thing to prevent citizens borrowing loans they can’t repay in the current market conditions. You are obviously very clever, you must be able to explain what was wrong with Sub Prime loans and the terrible insurance claims in the UK, For which Lenders now have to pay PIP insurance back to Borrowers who were encouraged to take out bad loans at the time Banks knew a stormy time was ahead. It’s all good if citizens are protected by making it difficult to borrow at this time.

  2. Dull Simutowe by the way do you what Government Bonds are?We are back to KK and Chiluba days,were Government was the major borrower from our Local banks.What this means is that People like our selves are not able to access loans from Banks,even when you chance a loan it is given to you at a very high interst rate.Mwanawasa and Magande stoped this trend,this result in lower interest rate and more loans for people.This helped to start buying cars and houses including land.All these are means of production.We are now back to square one.my heart bleeds.

    • Sido Mark
      You can imagine someone like Simutowe who even has access to the internet praising such nonsense what of an 1diot in Chawama?Edgar has a chance to win not because he has anything to offer but because we have so many 1diots out there who cant smell the coffee.By the time they realise it they will be buying mealie meal at K1,000.

  3. @Sido Marks

    It’s not a bad thing to prevent citizens borrowing loans they can’t repay in the current market conditions. You are obviously very clever, you must be able to explain what was wrong with Sub Prime loans and the terrible insurance claims in the UK, For which Lenders now have to pay PIP insurance back to Borrowers who were encouraged to take out bad loans at the time Banks knew a stormy time was ahead. It’s all good if citizens are protected by making it difficult to borrow at this time.

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