What is the ruling on income tax?

The Shaykh : A moment. What about income tax?

The questioner : I mean, does it come to the same meaning that I explained?

The Shaykh : Of course, all taxes today, without exception, are not permissible. Some of them may become permissible one day. When? When the system of Islam in collecting wealth is applied. I think you all know that in the Islamic state in all previous eras, especially in the first, second, and third eras, there was a known system for collecting wealth and placing it in the Bayt al-Mal (Treasury) of the Muslims. These are, in general, the funds of zakah, the funds of endowments, the funds of buried treasure, for example, and so on. Most Islamic states, if not all Islamic states, abandoned collecting wealth through lawful means and replaced these means with European, disbelieving methods called taxes. As you know, these taxes have many types, including the income tax you are asking about. If an Islamic state today reverses its method of collecting wealth to this modern way and returns to the lawful methods, wealth will accumulate in its treasury, praise be to Allah, and it will be spent on the other hand in a lawful manner. It will not be spent on entertainment, nor on things of extravagance and luxury related to a class of employees, from the king down to you. So the collection will be through lawful means, and the spending will also be through lawful means. These funds will accumulate in the state's treasury, and then an emergency arises, for example, to carry out a necessary project for the benefit of the Muslim people, or to repel a treacherous enemy. The state looks and finds that there is not enough money in the treasury to carry out that reform or this defense. At that time, it imposes an obligation that corresponds to the wealth of the rich. It is not a fixed tax—hold on. At that time, the Muslim government may resort to imposing taxes under this first condition, with varying rates according to wealth, and it does not become a tax that is necessary over the years. Rather, if the need is found for the public interest, this tax is found; otherwise, it is not.
These rulers, unfortunately, the saying of Allah the Mighty and Majestic, directed at the Jews, has come true for them: So they replaced the taxes with the Shari'ah. And this, without a doubt, will be the outcome of the matter. It is not that it will be; it was the outcome of the matter, as you see, from the humiliation and degradation that befell the Muslims, even more than the most humiliated of nations, who are the Jews. May Allah be our helper. Have I answered your question?

The questioner : ... We pay exactly what you ask of us in income.

The Shaykh : Yes, yes.

The questioner : Our Shaykh, regarding the Islamic bank, is it permissible to take from it?

The Shaykh : Take from it what?

The questioner : To build a house or something like that.

The Shaykh : You did not clarify.

The questioner : A loan, I mean.

The Shaykh : I know your question, but I want to be... A benevolent loan?

The questioner : No, it is not a benevolent loan...

The Shaykh : Then you have taken the answer...

The questioner : As we said, perhaps we know the answer, but we want...

The Shaykh : What do you want?

The questioner : The details.

The Shaykh : The details. In that case, we charge you with detailing the question for us.