High Court orders Dr Yunus to pay Tk119cr in taxes

The High Court has issued an order directing Nobel Laureate Dr Muhammad Yunus, founder of the non-profit organisation Grameen Kalyan, to pay Tk119 crore in taxes to the National Board of Revenue (NBR) for 2011-2017 tax years.

The HC bench of Justice Muhammad Khurshid Alam Sarkar and Justice Sardar Md Rashed Jahangir passed the order after hearing income tax reference applications filed by Grameen Kalyan challenging the legality of the claims made by the NBR.

Following the verdict, Attorney General AM Amin Uddin told reporters that Grameen Kalyan had already paid Tk436 crore of the Tk555 crore claimed by the NBR. Now it has to pay the remaining Tk119 crore.

The ruling came after the court settled a case filed by Dr Yunus challenging the tax claimed by the NBR. 

In June 2023, the think tank Yunus Centre released a statement in response to news articles about Dr Yunus' tax payments.

On 1 January this year, a Dhaka court sentenced Yunus and three other top officials of Grameen Telecom to six months in jail in a case filed by the government over labour law violations. Dr Yunus is the chairman of Grameen Telecom.

Soon after the verdict was delivered, the same court granted bail to all four for a month, following separate bail pleas.

What was in the Yunus Centre statement

The Yunus Centre said, "His main sources of income are honorariums for his lectures, money earned from the sale of his authored books and prize money. All the money earned by him abroad is brought through proper banking channels. The tax authority remains fully informed of the matter as all sources of his money and income are presented in his tax returns."

It continued, "While thinking of what to do with his money, Prof Yunus came up with several decisions. He never wanted to be the owner of any asset and does not own any asset anywhere. He wants to remain free from any ownership [land, house, car, shares, etc]. So, he decided to form two trusts with the money he earned.

"These trusts were – Professor Muhammad Yunus Trust, a usual philanthropic trust, and a smaller one (6% of the total money), for the benefit of his family members, called the Yunus Family Trust. He incorporated a provision in the trust deed of the family trust that one generation after him, the remaining fund of this trust must be transferred to the Yunus Trust."

The Yunus Centre said he had done so to ensure that the money in the trusts would be safe under the supervision of the trustees during his lifetime and beyond that and that the trustees would be active in achieving the objectives of the trusts.

The Yunus Centre said, "If he had kept his money with him he would actually have to pay less tax because the rate of personal income tax is lower than institutional tax. His income tax advisor advised that he would not have to pay gift tax if he donated the money to the Yunus Trust because it is a philanthropic trust.

"As to the family trust, his tax advisor's advice was that in such a case (the case of making some arrangement for the safety of his wealth in his absence) he would not have to pay any tax because the law allows it."

It said, "On the basis of this advice, Prof Yunus did not pay any tax at the time of the transfer of the money to both trusts. But the tax officer concerned, after Prof Yunus' tax return was submitted, imposed a gift tax since there was a declaration of gift in the tax return.

"In consultation with his tax lawyer, Prof Yunus decided to seek a decision from the court. The court has given its opinion in favour of paying the tax."

The think tank said there was no question of tax evasion as the press was accusing him of.

"It was Prof Yunus who went to court to seek a decision on whether he had to pay the tax. The government did not go to court to demand the tax. The tax authority never said, at any stage, that he had evaded tax. There is no question of tax evasion here. The question was all about the interpretation of the law relating to the matter," the Yunus Centre added.