The Tax Evasion of Dr. Mohammad Younus- A Nobel Laureate

On 31^st May 2023, The High Court of Bangladesh Provided a verdict on Professor Dr. Mohammad Yunus’s Tax case.

The High Court declared that it found the Nobel Laureate guilty of tax evasion. And ordered him to pay BDT 120 million as tax. The verdict came after a long procedure that took place over 8 years. Finally, the verdict went against the professor and he has been proven guilty of violating the Gift Tax law of 1990.

During the whole time, Dr. Yunus garnered media sympathy both at the national and international level on a sub-juris matter. In this context, it is worth exploring what actually happened and how Dr. Yunus became guilty of evading tax.

The Case

The issue started when Dr. Yunus channeled his personal wealth to three of his non-profit trusts. In the tax year, 2011-12, 2012-13, and 2013-14, Dr Yunus donated Tk. 76.73 crore to three trusts – Professor Muhammad Yunus Trust, Yunus Family Trust, and Yunus Centre.

According to the Income Tax statement, Dr. Yunus owned personal wealth worth BDT 560 million and paid BDT 13.7 million tax in 2010-2011. During 2011-12, Dr. Yunus earned BDT 100 million and paid taxes worth BDT 13.6 million.

During the tax year 2011-12, 2012-13, and 2013-14 he donated BDT 760 million to the aforementioned trusts. As a result of these donations, his income tax reduced drastically. Such an unusual reduction drew the National Bureau of Revenue (NBR)’s attention. After audit, NBR demanded BDT 160 million against these gifts under the Gift tax law.

But The professor denied to pay the amount as he had contradictory arguments. His legal argument was that he donated these amounts fearing ‘death’, and hence they are not taxable amounts.

But interestingly, a deeper insight suggests that he and his family members are the trustee members of these trusts. The constitution of these trusts also reveals interesting observations. There are provisions of these trusts that require the entity to pay the livelihood of his family.

Another provision also provides him with the sole power to spend the trust’s wealth on his own decision. So, it seems the wealth of these trusts is totally under his control, and the benefactor is also him and his family. Hence, it is clear that he actually bypassed the amounts to his own trusts to evade taxes.

The Legal Procedure

The verdict came through a transparent and precise legal procedure. After NBR’s demand for a tax of BDT 120 million, Dr. Yunus disagreed and sought legal intervention. He immediately appealed to the Appellate range-3. Later he also appealed to the Appellate tribunal of the NBR after rejection from the Appellate range-3.

However, The Tribunal also rejected his application. Later he filed three reference lawsuits to the High Court on this matter. After intense hearings in 2023, the high court has now declared him guilty of violating the Gift Tax Law of 1990 and ordered him to pay the amount.

During the whole process, Dr. Yunus portrayed himself as a victim of the state repression against him. He enjoyed media sympathy and drew national and international attention over a sub-juris matter. But it seems the independent judiciary is also finding him guilty.

It seems Professor Yunus had a dubious intention behind the donations. He wanted to reduce his personal wealth by channeling his wealth to a trust owned and dominated by himself and his family so that they can enjoy them without paying income tax. It is a clear evasion of tax in the eye of the law. Therefore, High Court found him guilty and ordered him to pay the amount as a verdict of his own lawsuit. Hence, the tax evasion case was hardly any ‘repressive’ measure against him. Instead, he used his fame and honor to garner sympathy to avoid the law. For a Nobel laureate and seasoned economist, it is unfortunate and shameful to opt for illegal means to evade tax.

Written by Motiur Rahman

Motiur Rahman is an Independent Researcher and Analyst

×