The Awami League government is unlikely to extend the tax exemption facility to Grameen Bank, which is under scrutiny following its alleged diversion of overseas fund. The facility expires by the end of this month, sources in the Banking Division of the Finance Ministry told daily sun on Monday.

Finance Minister AMA Muhith asked the Finance Division secretary Sunday afternoon to place the Grameen Bank application seeking extension of the tax waiver facility. The government move came following reports that have revealed diversion of fund by Grameen Bank managing director and Nobel laureate Dr Muhammad Yunus from the bank to another institution.

Prime Minister Sheikh Hasina also came down heavily on Dr Yunus on Sunday for what she termed exploitation of the poor loan recipients. She also ordered a probe into the fund diversion. “The finance minister asked the Banking Division secretary to submit the file of Grameen Bank. The government is now unlikely to extend the corporate tax waiver the bank has been enjoying for the last 27 years,” said a high official of the division.

The facility was last extended by the previous army-backed interim government for two and a half years. The bank has been enjoying the facility under the provision-33 of the Grameen Bank Ordinance, 1983. The minister is expected to sit with the officials concerned any time today (Tuesday) to discuss the matter.

Four months ago, the Grameen Bank forwarded a fresh application to the Finance Ministry seeking extension of the tax waiver facility. Then the finance minister sent the proposal to the National Board of Revenue, sources said.

Following the telecast of a documentary on a Norwegian television revealing that Dr Yunus diverted the fund from Grameen Bank to Grameen Kalyan, Muhith said on Saturday that he did not see anything wrong with the settlement taking place more than a decade ago.

Earlier, the Awami League government rejected a Grameen Bank proposal to cut the government’s stake in the bank from 25 percent to 15 per cent despite endorsement by the caretaker government.

Usually, a company not listed with any of the stock exchanges has to pay 55 per cent corporate tax on its annual profit.

The Grameen Bank posted a net profit of Tk 371.5 million in 2009, down from over Tk 1.30 billion of the previous year, according to the bank data. The total number of its borrowers stood at 8.33 million as of October last. Of them, 97 percent were women. With 2,565 branches, GB provides services at 81,373 villages, more than 97 percent of the total villages in Bangladesh.

In 2009, Grameen opened 23 new branches bringing 99 percent of rural Bangladesh under its coverage.

According to a recent report, about 7.0 million people have so far received microcredit from Grameen Bank. Of them, 97 percent are women.

Source: daily-sun, Bangladesh/7th Dec 2010