Paying and Collecting Taxes and Customs

The conflict between private property and public interest has largely occupied human thought. Over history, philosophers and thinkers tried hard to solve the problem by taking one side for a time and the other for some other time. Modern history has witnessed the application of capitalism and communism as two opposite regimes on extreme poles. Reality tells that the world  has suffered from the consequences of both applications.

In Islam, there is no room for such conflict at all if people truly apply the prescribed guidelines regarding their financial obligations. The right of the poor in the wealth of the rich is not only a social obligation but also an act of worship and a way to draw near to Allah.

In his response to this issue, Dr. Rajab Abu Maleeh, PhD. in sharia stated,

In order to respond to this issue, we should review the following points:

•  Is it permissible for  a Muslim ruler  to impose taxes or customs?
•  The ruling of paying these taxes or customs on the part of  individuals.
•  The ruling of working in collecting taxes and customs.

First: Levying taxes and customs by the ruler
The basic element in the financial system of the Islamic state is the payment of Zakah, which is better than taxes due to several reasons  as follows:

1.  The system of Zakah addresses the conscience of  individual, urges him to pay such an obligation which is one of the five pillars of Islam and awakens his desire for the greatest reward from Almighty Allah – Exalted be He. Almighty Allah says, (Who is he that will lend to Allah a goodly loan so that He may multiply it to him many times? And it is Allah that decreases or increases (your provisions), and unto Him you shall return) (Al-Baqarah 2: 245); and (The likeness of those who spend their wealth in the Way of Allah, is as the likeness of a grain (of corn); it grows seven ears, and each ear has a hundred grains. Allah gives manifold increase to whom He pleases. And Allah is All-Sufficient for His creatures’ needs, All-Knower) (Al-Baqarah 2: 261). Allah also threatens those who abandon it  with severe torment on the Judgment Day, (And those who hoard up gold and silver, and spend it not in the Way of Allah, -announce unto them a painful torment. On the Day when that [Al-Kanz: money, gold and silver, etc., the Zakah of which has not been paid] will be heated in the Fire of Hell and with it will be branded their foreheads, their flanks, and their backs, (and it will be said unto them): This is the treasure which you hoarded for yourselves. Now taste of what you used to hoard.) (Al-Tawbah: 34 – 35). Hence, it is infrequent in the Muslim society that  some Muslims  evade the payment of such obligation. Besides, this obligation cannot be dropped by the passage of time. Moreover, the ruler has the right to forcibly collect it from  Muslims as long as they are still alive or from the inheritance prior to its distribution, in case one dies before paying it, since it is an act of worship that involves a right for Almighty Allah and a right for those who deserve it.

2.  Its rate is small, since it ranges between 2.5 and 5% at most, and this encourages  Muslims to pay such a small rate. Hence, the number of people who pay Zakah increases. This, of course, is for the benefit  of the poor and the needy.

3.  The system of Zakah does not  demand  Muslims to pay Zakah twice a year for the same amount of money, since it is imposed only once annually, unlike the tax system, through which more than one tax is levied on the same money, such as sales tax (which is levied on the money every time it passes from a retailer to another retailer, and it is, in turn,  paid by the customer).

4.  The rate which a Zakah giver pays is the same, meaning that it is not multiplied upon the multiplication of the money. Thus, the one who – for example – owns a hundred thousand pounds (100.000) pays  2.5 %, which is the same percent paid by the one who owns a million pounds or more.

So, if the ruler  applies the system of Zakah and still it does not satisfy the basic requirements and necessary expenditures of the state, then he is  allowed to levy other financial demands in the form of fair taxes that do not transgress the rights of property owners; this is to be done after referring the issue to the (concerned) authorities to estimate the amount of such taxes. Then, this could be done on the condition that these taxes are fair, being collected from the rich and only spent on necessary needs. They are dropped as soon as the need for them is no more existent.

As for customs, there is no prohibition in paying them as long as  they serve the public utilities and as long as they are fair so that  they would encourage local production on one hand and  provide income for all people on the other. However, the government is required to provide suitable replacement (to the imported products) so that people do not have to use the foreign product no matter how much the customs are!

Second: payment of taxes and customs by common people
Such payments only fall under one or two cases; either the taxes and customs are fair, meaning that they are duly collected and spent in due channels, or unfair, being unduly collected. Thus, if they are fair, then there is no problem. However, if these payments are unjust, then  Muslims should remove them  as much as possible without assuming a prohibited means to do so. Hence, it is impermissible to offer a bribe in order to evade such taxes. Yet, it is permissible to  make advantage of  laws  to lift or lighten these payments.

Third: Working in collecting taxes and customs
This depends on whether the taxes and customs are fair or unfair. So, if they are fair, then it is permissible to work in collecting them. However, if they are unfair, it is then impermissible to work as tax-collector unless a person intends to lift or lighten them.  Sheikh Ibn Taymiyah (may Allah be merciful with him) deemed it permissible for  Muslims to work in such places [jobs] in case their work would help in  removing injustice. In this context, sheikh Ibn Taymiyah (may Allah be merciful with him) said:
“In case one works hard to administer justice and remove injustice according to the best of his means and his assumption (of the task) is better and more beneficial for the Muslims than others, and his undertaking of fiefdom is better than that of others, then it is permissible for him to remain in charge of the fiefdom and keep custody of it. In such a case there is no harm on him. Rather,  keeping  the post is better than relinquishing it unless he leaves it for a better person. Besides, it could be obligatory for him to undertake this task in case none other than him is able to carry it out. For, spreading justice, as much as possible, and lifting injustice – according to the best of one’s means – is a communal duty that is carried out by the one who is capable of doing so incase none else can supersede him. In such a case, he is not required to do what lies beyond his reach, of lifting injustice.”

In turn, it is permissible for  Muslims to work in such places with the intention of lifting or lightening injustice.