Question
What is the Islamic concept of taxation with relation to prevalent tax laws in the world (i.e. income tax wealth tax, sales tax, agricultural tax etc.)
Answer
According to the Islamic Shari`ah, an Islamic state cannot impose any taxes upon its Muslim citizens, besides Zaka’h.
As far as the non-Muslims living in an Islamic state are concerned, they become citizens of an Islamic state through an agreement between themselves and the Islamic state. Taxes upon these non-Muslims shall be governed by the agreement that was mutually agreed upon between them and the Islamic state. The taxes proposed on the non-Muslim citizens in the agreement may or may not be equal to or related with the rates specified for Zaka’h.
In view of the above explanation, imposition of Income tax, Wealth tax and all other direct or indirect taxes, by an Islamic state upon its Muslim citizens, is not in accordance with the directives of the Islamic Shari`ah.
19th May 2000