Dr. Muhammad Yunus had paid Tk12,46,72,608 in taxes to the National Board of Revenue (NBR) in cases filed in connection with unpaid taxes on so-called “donations”
The Appellate Division of the Supreme Court ordered Nobel Laureate Prof. Dr. Muhammad Yunus to pay 12 crores as tax on so-called “donations” owed between 2011 and 2013. The lengthy legal proceedings spanned eight years. The court denied his appeal and found him culpable of violating the 1990 Gift Tax law. After his appeal to the Supreme Court was denied, he paid the tax debt with a pay order and subsequently informed the Tax Commissioner of the payment.
On July 23, a four-member tribunal of the Appellate Division, led by chief justice Hasan Foez Siddique, issued the order after hearing Dr. Yunus’s application for permission to appeal a High Court’s decision. The permission to appeal the High Court’s verdict was submitted on June 21. On July 9, the chamber court scheduled an Appellate Division hearing for July 17.
From Nobel Laureate to Tax Evasion Suspect
Dr. Yunus, who had a net worth of TK 560 million, paid TK 13.7 million in 2010-2011 and TK 13.6 million in 2011-2012 in taxes after earning TK 100 million in each of those years. However, in 2011-12, 2012-13, and 2013-14 tax years, he made substantial donations of TK 760 million to the above mentioned trusts, resulting in a substantial reduction in his income tax liability.
![](https://i0.wp.com/pressxpress.org/wp-content/uploads/2023/07/List-of-trusts-where-Dr.-Yunus-had-transferred-wealth-as-gift-to-evade-tax.jpeg?resize=738%2C254&ssl=1)
During the tax years 2011-2012 and 2013-2014, Dr. Yunus transferred a significant portion of his personal wealth to three non-profit trusts – Professor Muhammad Yunus Trust, Yunus Family Trust, and Yunus Centre – in an apparent attempt to evade taxes.
The National Bureau of Revenue (NBR) audited the matter and demanded TK 160 million in accordance with the Gift tax law against these donations as a result of this abnormal decline in tax payment accompanied by a substantial donation.
Dr. Yunus argued that he made these contributions out of concern for his “death” and that they should therefore not be considered taxable. Upon further examination, it was discovered that Dr. Yunus and members of his family were trustee members of these trusts and that the trusts’ constitutions included provisions for his family’s sustenance. Moreover, the trusts gave him sole discretion over how to spend their wealth, indicating that he effectively controlled the funds. As he and his family were the ultimate beneficiaries of these funds, suspicions arose that he had transferred them to his own trusts to avoid paying taxes.
A Timeline of Events
![](https://i0.wp.com/pressxpress.org/wp-content/uploads/2023/07/Dr-Yunus-Amount-of-Tax-fine.jpeg?resize=726%2C408&ssl=1)
Under the Gift Tax Act of 1990, the NBR sent Dr. Yunus a notice demanding Tk12.28 crore in taxes on a total donation of Tk61.57 crore for the 2011-2012 tax year. During the 2012-2013 tax year, the NBR demanded Tk1.60 crore for a donation of Tk8.15 crore. The NBR then demanded Tk1.50 crore in taxes against a donation of Tk7 crore for the tax year 2013-2014.
Prof. Yunus challenged the imposition of taxes on the donated funds before the Tax Appellate Tribunal (Appellate range-3). Dr. Yunus argued in the case that the NBR is prohibited by law from taxing donations. Subsequently, he also appealed to the NBR’s Appellate Tribunal after being denied by Appellate Range-3.
On November 20, 2014, the court denied his petition. Yunus submitted three writ petitions to the High Court in 2015. In a statement released in early June of this year, Yunus Centre explained that Prof. Yunus’ tax advisor had advised him that he would not be required to pay gift tax on money donated to a charitable trust. After lengthy proceedings, the High Court has now found him guilty of violating the 1990 Gift Tax Law and ordered him to pay the fine.
“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 favor of paying the tax,” Yunus Centre said.
Dr. Yunus portrayed himself as a victim of state repression throughout the entire process, garnering media sympathy and attracting national and international attention to the sub-juris matter. However, the independent judiciary eventually found him guilty.
Dr. Yunus initially paid Tk30 million as a condition for filing a petition with the Appellate Division in response to the National Bureau of Revenue’s demand for over Tk 150 million in taxes. Tuesday, following the Appellate Division’s decision, he paid the remaining Tk 124.6 million.
It is upsetting and shameful to see a Nobel laureate and seasoned economist evade taxes through illegal means. Dr. Yunus attempted to reduce his wealth by funneling funds to a trust that he and his family controlled, allowing them to enjoy the wealth tax-free. In the minds of the law, such conduct constitutes a blatant case of tax evasion.