Tax on donation: HC justifies imposition of tax on Yunus

The High Court today justified the decision of imposing tax on the money gifted by Nobel Laureate Muhammad Yunus to his three charitable trusts.

The HC verdict means that Dr Yunus will have to pay around Tk 12 crore as tax on the money he donated to his trusts, Attorney General AM Amin Uddin told reporters.

He said around Tk 15 crore tax was imposed on the donated money in different years and Prof Yunus has deposited over Tk 3 crore to the office concerned before challenging the decisions.

The HC bench of Justice Muhammad Khurshid Alam Sarkar and Justice Sardar Md Rashed Jahangir delivered the verdict after rejecting three separate applications filed by Yunus challenging the tax liability imposed on the money he gifted to the trusts.

The court said a person must pay tax on his or her gifted money under the Gift Tax Act, 1990, and therefore, Muhammad Yunus cannot be exempted from the tax.

It is evident from the documents that Dr Yunus has not donated the money from the "death thought" as he controlled the trusts as a living person and beneficiary, the HC bench said.

The tax assessing office has imposed the tax in accordance with the law and the then tax-commissioner and Tax Appellate Tribunal have upheld the decision rightly, the HC said, adding that it does not find any illegality in those decisions.

Details of the verdict could not be known as its full text was not released yet.

Yunus's counsel Mustafizur Rahman Khan told The Daily Star that his client would take the next steps after receiving the certified copy of the HC verdict.

According to the case documents, Yunus donated Tk 76.73 crore to three trusts -- "Professor Muhammad Yunus Trust", "Yunus Family Trust" and "Yunus Centre" -- in the tax years 2011-2012 to 2013-2014.

The commissioner of taxes imposed a "gift tax" worth Tk 15.4 crore on the donated money.

Prof Yunus filed appeals with the Tax Appellate Tribunal challenging the imposition of taxes on the donated money. However, the Tax Appellate Tribunal upheld the decision of the Deputy Commissioner of Taxes (DCT).

Then, he submitted three separate income tax reference applications to the HC challenging the legality of the Tax Appellate Tribunal decisions.

Before filling the appeals and income tax reference applications, he deposited over Tk 3 crore to the office concerned of the state, court sources said.