Fatwa #59352 July 2002United Kingdom
Regarding Q.3431, is it permissible for one to declare 'I have no income' when he HAS an income?
Question
If one earnes $500 a month and does not reveal it to a government when he is expected to, it is equivalent of saying to the government,'I earn nothing'. If one does not reveal one part of his income to a government and reveals one part as his full income, is it not a lie? For example, if one earnes $500 a month and reveals to the government only $250 as his monthly income, he will be telling the government that he earnes $250 a month. Which is, ofcourse, a lie because he does not earn $250, he earnes $500 a month. Please kindly answer in detail. Please note that evading tax is a form of corruption, under any type of government.
Answer
The first point to be born in mind is that not all taxes can be termed as%0D%0Aunjust.%0D%0A%0D%0AThe government of a country has the right to demand some form of taxes from%0D%0Aits citizens. After all, they do enjoy many of the public conveniences%0D%0Aprovided by the government. The citizen should thus contribute to such%0D%0Aamenities.%0D%0A%0D%0ASome people would counter this by complaining of the poor quality of%0D%0Aservices provided by the government. While we do accept that the level of%0D%0Aservices leaves much to be desired, putting emotional arguments aside and%0D%0Aviewing the situation rationally, we cannot deny that such services do%0D%0Aexist, and have to be funded.%0D%0A%0D%0AThe fuqaha have mentioned that the government has the right to impose public%0D%0Aprojects on the populace. By way of example, if an area requires a dam, the%0D%0Agovernment can impose upon the community that will benefit from dam to fund%0D%0Athe building of the dam. Therefore, it can be understood that in principle,%0D%0Athe government has a right to claim for the public amenities provided.%0D%0A%0D%0AOn the other hand the taxes demanded by government may be exorbitant. It is%0D%0Aquite clear that presently governments squander large amounts of money, and%0D%0Acorruption is rife. A certain degree of the taxes demanded are no doubt%0D%0Aunjust.%0D%0A%0D%0AThe crucial question that arises is that what fraction of taxes can be said%0D%0Ato be legitimate, and what portion unjust? What formula can be applied to%0D%0Adetermine these ratios?%0D%0A%0D%0AShaikhul Islam Mufti Taqi Uthmaani Saheb has conceded that there is no magic%0D%0Aformula to solve this problem. His suggestion, which appears to be the most%0D%0Aequitable solution, is that each person should use the best of his%2Fher%0D%0Adiscretion, and fix an amount that he%2Fshe perceives to justly reflect a fair%0D%0Aamount that he%2Fshe owes the government for the amenities provided. It is%0D%0Alargely a matter left up to the conscience of the individual.%0D%0A%0D%0AThe issue is not straight forward concealing one's income. Rather, it is in%0D%0Athe context of government corruption.%0D%0A%0D%0Aand Allah Ta'ala Knows Best%0D%0A%0D%0AMoulana Imraan Vawda%0D%0AFATWA DEPT.%0D%0A%0D%0ACHECKED AND APPROVED CORRECT: Mufti Ebrahim Desai