The Ruling of Creating Contemporary Taxes (Value Added Tax as a Model)

Abstract

This study aims to reach the Islamic jurisprudential ruling of creating new taxes, and the research has focused on a model of Value Added Tax “VAT”, considering the economic and social effects that result from its application, and the extent of its compatibility with the Islamic Lawful purposes which aim to achieve justice, and charity and mitigate difficulties. In order to reach this goal, the study begins with the definition of taxes in general, then VAT: (which is an indirect tax imposed on the sale of goods, or the import of all goods and services "except for what is excluded by a legal text", at each stage of trading, and it is borne by the final consumer), then clarifying its characteristics and effects, followed by stating the opinions of Islamic jurists about this tax, their evidence, and the most preponderant opinion. The study concludes that Islam gives priority for warding off mischiefs over bringing benefits, therefore preventing harm, distress and difficulties from the poor and low-income persons is better than bringing benefits. Accordingly: the researcher thinks the most preponderant opinion is to prevent this tax, and in the event there is a need to impose an excessive financial charge; it is more adequate to graduate in choosing the types of taxes, for example, the income tax shall take precedence over VAT; for may considerations, such as its proximity to justice.