Can we use interest money to pay off Tax?
We have to pay a large amount of Council Tax a year. During the year interest money is accumulated on a savings account that I have. I do not spend the interest money at all as it is haraam. Can I use this money to pay off my annual Council Tax, which is prescribed by the govenment – as there is no basis for it’s payment in shariat?
One may offset interest earned with interest payable if both are from the same avenue. Example: if one accrued interest from Standard Bank and Standard Bank charges interest, the interest accrued could be offsetted with the interest that is payable to Standard Bank.
Some Ulama have permitted the use of interest monies to pay government taxes that are exorbitant to the extent that it is unjust and oppression.
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai