Tax Avoidance and the Challenges of Non-Criminalization

Abstract

The imposition of new and variable taxes on the people by the government, as a secondary ruling and due to significant reasons such as public interest and social necessity, is permissible. In fact, taxation is an inevitable economic element; however, whenever rulers have decided to levy taxes, certain groups have opposed it through evasion and avoidance. In this research, which has been conducted using a descriptive–analytical method, and by relying on the description and analysis of propositions in the jurisprudence of Islamic schools as well as the library method, the following conclusion has been reached: tax evasion refers to the undertaking of illegal actions such as falsifying accounts, failure to submit official records, conducting underground economic activities, and similar measures aimed at escaping tax obligations. In this regard, income subject to taxation or profits on which tax must be paid, or their amount, is usually hidden or reported lower than its actual figure, or deductions and tax exemptions are reported as higher than what they truly are. Consequently, it can be stated that tax evasion, through concealment, fraud, and violation of the law, accompanied by unlawful intent and harm to others in an Islamic society, based on jurisprudential and legal arguments, is considered unlawful, illegal, and criminal. In addition to the prohibition and invalidity of transactions resulting from it, the non-payment of such taxes may be regarded similar to non-compoundable criminal convictions in criminal law, and heavy penalties appropriate to a responsible society can be legislated for it.