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Regarding Q.3431, is it permissible for one to declare ‘I have no income’ when he HAS an income?

Answered according to Hanafi Fiqh by Askimam.org

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
unjust.

The government of a country has the right to demand some form of taxes from
its citizens. After all, they do enjoy many of the public conveniences
provided by the government. The citizen should thus contribute to such
amenities.

Some people would counter this by complaining of the poor quality of
services provided by the government. While we do accept that the level of
services leaves much to be desired, putting emotional arguments aside and
viewing the situation rationally, we cannot deny that such services do
exist, and have to be funded.

The fuqaha have mentioned that the government has the right to impose public
projects on the populace. By way of example, if an area requires a dam, the
government can impose upon the community that will benefit from dam to fund
the building of the dam. Therefore, it can be understood that in principle,
the government has a right to claim for the public amenities provided.

On the other hand the taxes demanded by government may be exorbitant. It is
quite clear that presently governments squander large amounts of money, and
corruption is rife. A certain degree of the taxes demanded are no doubt
unjust.

The crucial question that arises is that what fraction of taxes can be said
to be legitimate, and what portion unjust? What formula can be applied to
determine these ratios?

Shaikhul Islam Mufti Taqi Uthmaani Saheb has conceded that there is no magic
formula to solve this problem. His suggestion, which appears to be the most
equitable solution, is that each person should use the best of his/her
discretion, and fix an amount that he/she perceives to justly reflect a fair
amount that he/she owes the government for the amenities provided. It is
largely a matter left up to the conscience of the individual.

The issue is not straight forward concealing one’s income. Rather, it is in
the context of government corruption.

and Allah Ta’ala Knows Best

Moulana Imraan Vawda
FATWA DEPT.

CHECKED AND APPROVED CORRECT: Mufti Ebrahim Desai

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