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Bangladesh to Serve Grameen Bank Founder Yunus With Tax Notice

Bangladesh’s tax authority plans to pursue Grameen Bank founder Muhammad Yunus and eight organizations he is associated with, alleging the Nobel Peace Prize winner violated tax exemption rules.

The National Board of Revenue will serve notice on Yunus based on a probe of foreign income he earned and tax exemption he received between 2004 and 2011, according to a letter the board released to reporters yesterday. The move follows Prime Minister Sheikh Hasina’s approval for the board to take action.

Yunus received tax exemptions valued at 126.54 million taka ($1.6 million) on 506.18 million taka given to him in the form of honorariums, awards and royalties from foreign sources, according to the letter. Yunus did not get permission from the government before receiving the money as a “public servant” in accordance with tax laws, the board said.

“We will first seek an explanation from Grameen Bank,” Board Chairman Ghulam Hussain told reporters yesterday. “If the answer is not satisfactory, we will take legal action,” he said, without elaborating.

The Nobel laureate didn’t breach any law as Grameen’s managing director and his activities were approved by the bank’s board, the Yunus Centre, which promotes his ideas and programs, said in an e-mailed statement.

A government review earlier this year concluded that because Grameen, a microfinance lender, was created under a special law, it should be considered a government bank.

To contact the reporter on this story: Arun Devnath in Dhaka at adevnath@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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