Avoiding Taxes and Hiding Profits from Non-Muslim Government

22-7-2002 | IslamWeb

Question:

How can we make business in a non-Muslim country if after paying to all taxes for this country we lose all business (for ex. somebody is trying to sell Halal-meat, but if he pays all taxes he will lose his business, and weak Muslims will still buy Haram-meat? Can Muslims make their business not official (under law) or to hide profits from the government?

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

If a state imposes unfair taxes on business of those who live on its soil and under its authority, then there is no objection for them to make their business not official or to hide profits from government. This is because they are wronged, and scholars of Islam permit the wronged to ward off injustice even by means of telling lies and so on if no other way is available.

But, if the state imposes taxes (on those who live under its control) on behalf of the public interest like constructing beneficial projects: hospitals, schools and roads, and there is no sufficient fund nor neglect in expenditure of treasury (state's money), then one is not permitted to avoid paying what is imposed on him even though the state is not Islamic. But, if such a state is at war with Muslims, then it is forbidden to pay taxes to it.

Fatwa For more benefit on paying or evading taxes, please refer to Fataawa 212143, 203644, 85356, 91173, 89947, 129786, 196021, and 316597.

Allah knows best.