Employers, not employees, bear sin of evading lawful taxes
19-8-2013 | IslamWeb
Question:
I am based in South Africa and working for a company who imports household items from overseas especially china. We are into wholesale and retail trading, this business is dominated by Chinese, Pakistani, Indian and local Muslims & as well as Non Muslims for decades , who are into various malpractices, such as under invoicing (declaring less value to save taxes and duties on imports), sales without Value Added Invoices (VAT) , non payment of tax (avoidance of taxes) , bribing (for the purpose of misdeclaration) etc. Our boss says, we are forced to do these scruples practices as if we do not do we end up at high prices, and much less return compared to our competitors. As long as I know not only in our trade, but in almost all the businesses here whether carried out by corporate or individuals they do all sorts of things to compete the prices and get profit. When we think about this I don’t think we can do business without this practice. My questions are : 1. How do we look at it, in a Islamic perspective? 2. Can we justify by paying zakah and copy the same things which are done by others? 3. Is such earning Halal? If not what do we do for survival? 4. What shariat say about earning of employees working in such company when they know boss is involved in above malpractises?
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
Evading taxes may be lawful and it may be forbidden as we have clarified in Fataawa 157533 and 85356.
Therefore, it is permissible to evade the taxes that are forbidden, but if the taxes are lawful taxes that must be paid, then it is not permissible to evade paying them; the same ruling applies to paying a bribe to avoid paying taxes.
However, if the employees have nothing to do with it, this does not affect their work and the money they earn from their job, and they are not sinful for the negligence of the people in charge and them practicing those impermissible matters. Nonetheless, one should advise them to stop avoiding paying taxes or evading them. The fact that other traders practice what is forbidden is not a sound reason to do the same.
As regards the obligatory Zakah, then it does not have any relation with the taxes, and it is not permissible to consider the taxes paid to the government as Zakah. This is because Zakah is an obligation ordained by Allaah on the money and Allaah specified its recipients, so it cannot be given or spent on other than these specified recipients. Also, considering taxes as Zakah is considered as preserving one’s money against paying what he is obliged to pay, and this is not permissible. Therefore, Zakah must be paid whether or not one has paid the taxes.
Allaah Knows best.