Bangladesh govt orders legal action against Muhammad Yunus

Government ordered legal action against Nobel laureate Muhammad Yunus, for claiming tax exemption for income from foreign sources, misuse of power and violating foreign travel regulations.

Dhaka: The government on Monday ordered legal action against Nobel laureate Muhammad Yunus, who revolutionised Bangladesh`s microcredit sector, for allegedly claiming tax exemption for income from foreign sources, misuse of power and violating foreign travel regulations.

"The cabinet took a decision that NBR (National Board of Revenue) and the Banking Division of Bangladesh Bank may file separate cases against him (Yunus)," Cabinet Secretary Musharraf Hossain Bhuiyan told reporters after a cabinet meeting chaired by Prime Minister Sheikh Hasina.

He said the cabinet also thought that Yunus breached the Grameen Bank Ordinance by transferring its funds to an affiliate organisation of the micro lending agency while it was authorised only to lend it to the landless people alongside enjoying tax relief on his personal income in an improper way being a "public servant".

The top bureaucrat added that the cabinet decided that if needed, the Law Ministry would provide the revenue authority and the central bank the legal assistance towards that end.

Bhuiyan, however, did not explain how Yunus was treated as a government or public servant but officials said he should be regarded as a government official for his appointment as the managing director and CEO of the Grameen, in which the government has stake.

The 73-year-old economist is on a protracted row with the government due to obscure reasons and the wrangle apparently resurfaced last month when in a surprise move he put his weight behind main opposition BNP`s demands over the electoral system.

But the cabinet decision came hours after Yunus rubbished NBR allegations.

The NBR alleged Yunus brought home foreign currencies in honorariums, awards and royalties from foreign sources without "government permission" between 2005 and 2011, as the CEO of the Grameen Bank, in which the government has a minor stake.

NBR, however, did not find any evidence that Yunus obtained tax exemption facility illegally on his income from foreign sources as a wage earner though he did not have the government`s consent for accepting the foreign awards and money.

But Bhuiyan said under the law, the Grameen Bank alone might enjoy tax exemption, not other associate bodies or Yunus as a person and "public servant" as Grameen`s CEO and thus he was accused of tax exemptions.

The NBR report said Yunus earned Taka 50.61 crore between July 2004 and June 2011 in honorarium from 133 foreign organisations, awards from 10 organisations and royalty from 13 organisations while he got income tax exemption worth Taka 12.65 crore.

Legal experts, however, said according to Bangladesh`s tax laws, if a Bangladeshi remits his personal income through formal banking channels, the income is tax-free, a fact also acknowledged by the NBR in its report to the cabinet.

Yunus, who earned the repute for Bangladesh as the home of micro credit with his experiment of poor men`s banking, won the Nobel Peace Prize along with the Grameen in 2006.

He was forced to step down in May 2011 as the managing director of Grameen Bank three decades after he founded it following his protracted dispute with the government after he lost his final court battle to retain the position.