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Publication Date : 09-09-2013
The National Board of Revenue has not found any evidence that Grameen Bank founder Prof Muhammad Yunus as a wage earner obtained tax exemption facility illegally on his income from foreign sources.
The NBR, however, has raised questions that the Nobel laureate didn’t take permission from the government before receiving the money as a “public servant” in honorariums, awards and royalties from foreign sources between 2005 and 2011.
It said the banker to the poor also didn’t have the government’s consent for accepting those awards and money.
The findings come more than a year after the cabinet asked the NBR to look into whether the tax exemption that Prof Yunus had enjoyed as a wage earner was legal.
The NBR has recently sent a report to the cabinet after conducting a probe into Prof Yunus’ incomes from overseas sources since August 2 last year. The report might be placed at today’s cabinet meeting.
Yunus Centre, the Nobel laureate’s secretariat, has said that Prof Yunus remits earnings from books, speeches and prizes back to Bangladesh through formal banking channels.
According to tax laws, if a Bangladeshi remits his personal income through formal banking channels, the income is tax-free — a fact the NBR has acknowledged in its report to the cabinet.
The NBR report also included different non-tax issues that Prof Yunus had clarified in detail many times in the past. The microcredit pioneer termed all the accusations baseless.
The NBR was asked to submit a report on the amount of money Prof Yunus brought home from abroad as a wage earner during his stint as the Grameen Bank MD, and the amount of income on which he received tax exemption.
The NBR report shows Prof Yunus earned 50.61 million taka (US$6.54 million) between July 2004 and June 2011 in honorarium from 133 foreign organisations, awards from 10 organisations and royalty from 13 organisations. And he got income tax exemption worth 126. 5 million taka.
It, however, admitted Yunus didn’t take money from Grameen Bank for his foreign visits after he crossed the age of 60. Though he didn’t take permission from the board, he kept the Grameen Bank chairman informed about his visits, the report said.
Sources close to Prof Yunus told The Daily Star yesterday that the economist had always informed the board about all his activities and taken permission from it during his tenure as the bank’s chief executive.
The NBR has not advised the finance ministry to recover the money which has been given to Yunus in salary and allowances in the last 10 years before his removal from the bank.
It, however, suggested that the ministry take steps to recover the money that had been spent for purposes other than his salary and allowances during the period.
In July 2004, Bangladeshi nationals were exempted from paying taxes on all incomes from foreign sources, according to the NBR report.
Since the Grameen Bank MD was a “public servant”, he needed to take approval of the government before receiving honorarium, awards and royalties from any domestic and foreign organisations, or making any foreign visits, said the report.
But neither the bank’s MD nor any of its other officials or employees gets salaries from the government budget.
Legal experts said the ordinance that governs Grameen Bank does not expressly or implicitly provide that the bank’s MD would be regarded as a “public servant”.
In the 10 years up to his removal in May 2011, Yunus withdrew 5.30 million taka in salary and other benefits. The amount came down to 3.88 million sans allowances, meaning the economist took home about 30,000 taka in monthly salary.
The NBR raised the issue of Prof Yunus’ holding the position of MD for 10 years after he crossed the retirement age though the issue had been settled long ago between Bangladesh Bank and Grameen Bank.
It said the Grameen Bank Ordinance was breached by transfer of funds from Grameen Bank to Grameen Kalyan, one of its associated organisations, since the microcredit bank can only lend landless people. The NBR claimed that the fund transfer was illegal.
The report said Grameen Bank, a tax-exempt organisation, tried to evade taxes by transferring funds to Grameen Kalyan.
However, Yunus Centre earlier said Grameen Bank transferred the fund in line with agreements between the Bangladesh government and donors.
The NBR also checked income tax documents of the bank’s 13 associated organisations, and said eight of them had enjoyed various income tax facilities illegally.
But officials confirmed that companies bearing Grameen names have always submitted income tax returns and paid taxes. Some companies only availed themselves of the tax exemptions because the opportunity was available.
US$1 = 77 taka