The Prime Minister’s Office is scrutinising Garmeen Bank Ordinance 1983 to settle the issue of extending tax exemption facility to the microcredit organisation, said highly placed sources.

The tax exemption facility, provided in line with the ordinance since its promulgation, will no longer exist after today if it is not extended further.

The PMO is also examining the Grameen Bank’s service rule, especially the legality of Dr Muhammad Yunus to retain the post of its managing director for 20 years. The Grameen Bank issues came to the limelight after a Norwegian television documentary alleged that the Nobel laureate also founder of the bank has diverted fund of the bank to another venture.

The Finance Ministry on Tuesday sent a letter to the PMO apprising the latter of the information regarding the Grameen Bank’s tax exemption and the post of Dr Yunus.

“The government wants to amend the Grameen Bank ordinance 1983 to acquire more shares for the government in it and keeping that in mind the Prime Minister’s Office is scrutinising the ordinance,” said a senior official at the Finance Ministry.

The Grameen Bank is almost unlikely to get further extension of the tax waiver it has been enjoying for the last 27 years.

Prime Minister Sheikh Hasina earlier vehemently criticised Dr Yunus for, what she termed, exploitation of the poor loan recipients. She also ordered probe into the fund diversion.

The facility was last extended by the previous army-backed interim government. The bank has been enjoying the facility under the provision-33 of the Grameen Bank Ordinance 1983.

The National Board of Revenue has already informed the Finance Ministry that it (NBR) did not support the proposal for extending the corporate tax waiver from the next year, the sources said.

However, the NBR expressed its apprehension that the Grameen Bank might retain the corporate tax exemption, should it go to the court. The revenue board pointed out that the Grameen Bank is legally entitled to the facility as it is distributing micro-credit facilities to rural people.

Recently question has been raised over the bank’s interest rate and its real contribution to poverty alleviation though it has been making windfall profit for years together. 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 board also said that it always opposed the proposal for giving the Grameen Bank tax exemption facility but the Finance Ministry provided it in view of the legal status of the GB.

An official of the Finance Ministry said that a person could not be managing director for 20 years under any law, but Dr Yunus has been doing so violating all rules.

Source: daily-sun, Bangladesh/31st Dec 2010