Economy

Oppressive taxes like VAT and GST are Haram in Islam

The Pakistan government has announced it will implement VAT (Value Added Tax) under the new name of reformed GST (General Sales Tax) under American diktats. This is a conspiracy to destroy the industrialists, traders and the common masses. The shameless and honourless rulers are planning to impose taxes on 122 new major categories thus looting the masses by 150 billion rupees.

بِسْمِ اللّهِ الرَّحْمَنِ الرَّحِيمِ

Media Office of Hizb ut-Tahrir in Pakistan

Press Release

NO: PR10061

Date: Thursday 5th Dhul-Qa’da 1431 AH / 14/10/2010

Oppressive taxes like VAT and GST are Haram in Islam.
O Traders! Reject them and throw them in the faces of these agent rulers!!

The Pakistan government has announced it will implement VAT (Value Added Tax) under the new name of reformed GST (General Sales Tax) under American diktats. This is a conspiracy to destroy the industrialists, traders and the common masses. The shameless and honourless rulers are planning to impose taxes on 122 new major categories thus looting the masses by 150 billion rupees. These categories include meat, fish, eggs, vegetables, fruits, medicines, fertilizers, livestock, textiles, sports goods, surgical equipments, leather and many more. Indeed this is the real democracy which sacrifices the masses for the sake of a few elites, as is the practice in democracies of the East and the West.

The people ask from the government, why do they not collect Kharaaj and Usher on over 10 million acres of land? Why do they not collect Zakat from the rich in society? After all why have the Sandick and RikoDiq gold and copper mines, Thar coal reserves and oil and gas of Balochistan been handed over to foreign companies at throw away prices? And why can’t the revenues of these sources be spent on the welfare of the masses? After all what is the reason the government does not stop Rs.400 billion of seepage in corruption in just 4-5 corporations but is eager to impose a new tax on the masses?

Islam considers all indirect taxes including GST and VAT as haraam. In this type of tax, both the rich and the poor are taxed equally which is completely unfair. In Islam all the taxes are imposed only on the rich people like Kharaaj, Usher, Rikaz etc. In the Islamic revenue system, a huge sum is collected through Zakat and protecting a portion of public properties like Oil, Gas, Coal and Minerals etc for the state expenditure which, in the current capitalist system, is being pocketed by the foreign multinational companies by gaining ownership over this public assets. Besides these sources of revenues, the state cannot impose any tax on the common man. The Prophet صلى الله عليه وسلم warned the collector of such taxes with hell fire. The Prophet صلى الله عليه وسلم said;

لا یدخل الجنۃ صاحب المکس

“The one who collects tax (maks) will not enter into paradise” [Ahmed, Abu Dawood, Al-Hakim]

And he صلى الله عليه وسلم said;

وان صاحب المکس فی النار

“The one who collects tax (maks) is in hell fire” [Ahmed]

On the one hand, the government is not willing to reduce its royal expenditure whilst on the other hand it is even snatching the hard earned piece of bread of a common man.

Hizb ut-Tahrir calls upon the trader’s community and the industrialists to stand up against this oppressive tax and do not let the government build its palaces from the rations of the poor.

Only the Khilafah can liberate the Ummah from the cobwebs of these indirect taxes with its ideal economic system and provide the people of Pakistan much needed economic relief and prosperity who are currently suffering from this severe economic crunch.

Imran Yousafzai
Deputy Spokesman of Hizb ut-Tahrir in Pakistan