Bangladesh: Microfinance Innovator Accused of Tax Fraud

Published: 11 September 2013


Grameen Bank founder and Nobel Peace Prize recipient Muhammad Yunus was accused of violating tax exemption rules by Bangladeshi authorities on Tuesday. The allegation is the latest in a long running political and legal battle between Yunus and the government of Bangladesh.

Bloomberg reports that the National Board of Revenue (NBR) will serve a notice regarding foreign income earned from 2004 to 2011. Yunus received tax exemptions of US$1.6 million on foreign income valued at US$6.51 million. The board claimed that due to special circumstances under which Grameen was established Yunus is a public servant, despite not having a government position.

An Internal Resources Division Report stated that "[Yunus] did not take permission from appropriate authorities which is a must for ‘public servants’ travelling abroad."

“We will first seek an explanation from Grameen Bank,” NBR Chairman Ghulam Hussain stated in a move supported by Bangladeshi Prime Minister Sheikh Hasina. “If the answer is not satisfactory, we will take legal action," he said.

Yunus issued a statement acknowledging special circumstances establishing the bank but rejecting allegations of wrongdoing. "Grameen Bank was created by a special law. The board of directors holds absolute power under the law. Whatever Prof Yunus did he did with the permission and consent of this powerful board," the statement read.

For years the Bangladeshi government has alleged criminal activity of Yunus. He was accused of embezzlement and removed as managing director in 2011. Yunus has maintained that the government's actions are politically motivated.

Yunus founded Grameen Bank in 1983 to provide community development through microfinance.  He received a Nobel Prize in 2006.