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Rejoinder to The News Published in The Media Regarding  Professor Yunus’s Tax Payments

Rejoinder to The News Published in The Media Regarding  Professor Yunus’s Tax Payments

Press Relesae ( 9 June 2023 )

 

Professor Yunus’s personal funds, which have been at the centre of discussion on television and print media, is all his personally earned money. His main sources of income are honorarium for his lectures, money earned from the sale of his authored books, and prize monies. All the money earned by him from abroad are 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.

 

While Professor Yunus was thinking of what use to make with his money he came up with several decisions.

 

He 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 the money earned by him. These trusts were “Professor Muhammad Yunus Trust, (PMYT)”, a usual philanthropic Trust, and the other, a smaller one (6% 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 Family Trust that one generation after him the remaining fund of this trust must be transferred to the PMYT.

 

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 that, and the trustees would be active in achieving the objectives of the trusts.

 

How did the question of gift tax arise?

 

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 to the Family Trust 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. On the basis of this advice Professor Yunus did not pay any tax at the time of transfer of the money to both trusts.  But the concerned tax officer, after Professor Yunus’s 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, Professor 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 the tax" as being accused in the press. It was Professor Yunus who  went to the court to seek a decision whether he had to pay the tax. The government did not go to the 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. Now that the lower court has given a verdict in favor of paying the tax, Professor 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 Professor Yunus to pay the tax, then he will have the opportunity to use the money for the benefit of people and the planet in the way he thinks would be best for them.  That was his sole concern with regards to the payment of the tax. He does not personally benefit from either paying or not paying this tax.

 

A question has been raised in the press by some important people that Professor Yunus spends a large chunk of the trust money for his frequent personal travel abroad.  It is not true at all. All his international travel expenses are borne by the host organizations who invite him to speak at their conferences and other events. In addition, host organizations pay all costs for an additional person to travel with him as his companion.

 

He or his organization never has to bear any expenses for his international travels. Sometimes host organizations send private airplanes for his travel (Professor Yunus always tries to avoid it). Finding money for his international travel has never been his problem.

 

End

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