No question of Prof Yunus dodging tax

Nobel laureate Prof Muhammad Yunus's personal funds, which have been at the centre of discussion in the media, are all his personally earned money from the sale of his authored books, prize money, and honorarium for lectures, said the Yunus Centre.

All the money earned by him from abroad is brought through proper banking channels. The tax authority remains fully informed of the matter as all sources of his money and income are presented in his tax returns, it added.

The Yunus Centre yesterday sent a statement to the media to clarify the matter and present the actual information to all.

According to it, Yunus never wanted to be the owner of any asset and does not own any asset anywhere. He wants to remain free from any ownership (land, house, car, shares, etc). So he decided to form two trusts with his money.

These trusts are "Professor Muhammad Yunus Trust, (PMYT)", a usual philanthropic trust, and the other, a smaller one (6 percent of the total money), for the benefit of his family members, called the "Yunus Family Trust (YFT)".

He incorporated a provision in the trust deed of the YFT so that the remaining fund of this trust is transferred to the PMYT after one generation, read the statement.

He did it to ensure that the money in the trusts would be safe under the supervision of the trustees during his lifetime, and beyond and that the trustees would be active in achieving the objectives of the trusts, the statement also read.

How did the question of gift tax arise, the statement questioned.

If he had kept his money with him he would actually have to pay less tax, because the rate of personal income tax is lower than institutional tax. His income tax advisor advised that he would not have to pay gift tax if he donated the money to PMYT because it is a philanthropic trust.

As for the YFT, his tax advisor's advice was that in such a case (the case of making some arrangement for the safety of his wealth in his absence) he would not have to pay any tax because the law allows it, the statetment read.

On the basis of this advice, Prof Yunus did not pay any tax at the time of transferring the money to both trusts. But the tax officer concerned, after Prof Yunus's tax return was submitted, imposed a gift tax since there was a declaration of gift in the tax return, read the statement.

In consultation with his tax lawyer, Prof Yunus decided to seek a decision from the court. The court has given its opinion in favour of paying the tax.

There is no question of "evading tax" as being accused in the press. It was Prof Yunus who went to the court to seek a decision on whether he had to pay the tax. The government did not go to court to demand the tax. Tax authority never said, at any stage, that he evaded tax. There is no question of tax evasion here. The question was all about the interpretation of the law relating to the matter, the statement also read.

Now that the lower court has given a verdict in favour of paying the tax, Prof Yunus will have the option to pay the tax or go to the higher court to get their judgement on the issue. If the relevant tax law does not require Prof Yunus to pay the tax, then he will have the opportunity to use the money for the benefit of the people and the planet in the way he thinks would be best. That was his sole concern with regard to the payment of the tax. He does not personally benefit from either paying or not paying this tax, the statement read.

A question has been raised in the media by some important people that Prof Yunus spends a large chunk of the trust money on his frequent personal travels abroad. It is not true at all, the statement added.

All his international travel expenses are borne by the host organisations who invite him to speak at their conferences and other events. In addition, host organisations pay all costs for an additional person to travel with him as his companion, the statement also read.