Govt orders legal action against Yunus
NBR finds faults with Grameen Bank founder’s tax fileMustafizur Rahman
The cabinet on Monday ordered legal action against Grameen Bank’s founding managing director and Nobel laureate Muhammad Yunus for his alleged income tax evasion.
The order came after the National Board of Revenue reported to the weekly cabinet meeting that the former managing director of the Grameen Bank had enjoyed tax exemption as a ‘wage earner’ on his income during foreign tours between 2004 and 2011.
‘During the time, Professor Yunus received honorariums from 133 institutions, awards from 10 and royalties from 13 organisations abroad. He earned a total of Tk50,61,85,588 from the foreign institutions and got exempted from paying Tk12,65,47,397 in taxes as a wage earner,’ cabinet secretary Mohammad Musharraf Hossain Bhuiyan told a press briefing after the meeting.
The NBR observed that Yunus being a public servant as the managing director of Grameen Bank had enjoyed the facility without proper procedure.
‘He had not taken permission from the government before the overseas tours during the period …He enjoyed the tax exemption without due procedure, which was unlawful,’ the cabinet secretary said, referring to the NBR report.
In reply to a query, the cabinet secretary said the NBR, Bangladesh Bank and the banking division had been asked to take legal actions against Yunus for his alleged irregularities. ‘What he had done was not in keeping with the laws. So the cabinet has asked for actions as per the existing laws.’
Musharraf said the cabinet also found that Yunus had violated the Grameen Bank Ordinance by transferring funds from Grameen Bank to Grameen Kalyan, one of its associate organisations, since the micro-credit bank could only lend money to landless people. Yunus also lent money allegedly to his family business – Packages Corporation at a low interest rate, he noted.
The cabinet on August 2 last year directed the Internal Resources Division to ascertain whether or not Grameen Bank’s former
managing director Muhammad Yunus had brought home foreign currencies as a ‘wage earner’ and enjoyed tax exemption during his tenure at the bank.
It also asked the Bangladesh Bank and Financial Institutions Division to inform it of the total amount of salaries and other allowances that Yunus had received as Grameen Bank’s managing director for the period beyond the approved age limit of 60.
The financial benefits he received beyond his salaries after the retirement age of 60 were found illegal, the cabinet secretary said.
The Bangladesh Bank removed Yunus as managing director of Grameen Bank on March 2, 2011 when he turned 71 on the ground that he was past the retirement age of 60.
The Supreme Court declared that holding of the post of managing director by Yunus became illegal after he exceeded the age of 60.
The origin of Grameen Bank can be traced back to 1976 when Yunus launched a research project to examine the possibility of designing a credit delivery system, without taking any collateral, that targeted the rural poor, especially women. In October 1983 the Grameen Bank Project was transformed into a bank by government legislation.
Under the law, only the Grameen Bank may enjoy tax exemption, not other associate bodies or Yunus as a person, Musharraf mentioned.
He said that the government would soon make the NBR report public.
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