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Fatwa #142061 May 2006South Africa

With what I am earning today, I am eligible to pay the Income Tax in my country. Now my question to you is can I exploit the IT rules

Question

I’ve a question regarding the payment of taxes in my country.

With what I am earning today, I am eligible to pay the Income Tax in my country. Now my question to you is can I exploit the IT rules so that I don’t have to pay the tax or pay minimum tax. Whats the ruling in shariah for this?

Answer

Principally, income tax is not a legitimate Shar’ee tax which may be imposed by an Islamic state. However, if a person chooses to adopt the nationality of a non-Muslim country, then he is morally obligated to obey the rules of that country. This is in keeping with the teachings of Nabi [sallallaahu alayhi wasallam] that a Muslim should not behave in such a manner that will bring himself (and Islam) into disrepute (a sure outcome of tax evasion).

However, we sanction tax planning which is employing concession, rebates, etc. available to the taxpayer within the country’s tax framework in order to minimize the tax liability.

and Allah Ta'ala Knows Best

Mufti Ebrahim Desai

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