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Lying about Income to Reduce Taxes: Allowed?

23 August, 2016
Q As-salamu `alaykum.You might have known about the bad financial conditions in some countries especially for traders and businessmen. Under such circumstances, is it allowed for a businessman to lie about his income to decrease the tax he ought to pay?

Answer

Wa `alaykum as-Salamu wa Rahmatullahi wa Barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear brother, thank you for your question and for your concern to follow Islam’s rulings concerning in your financial matters.

Responding to your question, Prof. Dr. Monzer Kahf, a prominent Muslim economist and counselor, states,

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Generally speaking, lying is not permissible, but declaring part of the income that is documented and not telling about all income is permissible in my opinion. This is a civil matter not a religious one (except for plain lying which is not permissible religiously). This applies to all countries in matters of all taxes.

Allah Almighty knows best.

About Prof. Dr. Monzer Kahf
Dr. Monzer Kahf is a professor and consultant/trainer on Islamic banking, finance, Zakah, Awqaf, Islamic Inheritance, Islamic estate planning, Islamic family law, and other aspects of Islamic economics, finance, Islamic transactions (Mu'amalat). Dr. Monzer Kahf is currently Professor of Islamic Finance & Economics at the Faculty of Economics and Management, Istanbul Sabahattin Zaim University, Turkey