Shariah View on Consumption Tax: Malaysian GST and SST as Case Studies
Mahadi Ahmad, Burhanuddin Lukman
International Shariah Research Academy for Islamic Finance
Saba’ Radwan Jamal Elatrash
Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia
A consumption tax is a levy on the purchase of goods and services made by consumers as a source of revenues for the governments. This research aims at investigating the Shariah point of view on the compatibility of imposing a consumption tax like the GST and SST on goods and services purchased by consumers. The research used a qualitative method and relied on Islamic primary, secondary sources, relevant laws of Malaysia and other relevant materials. The findings of the research showed that tax is permissible with conditions, but consumption tax is not encouraged in Islam, whether on goods and service bought by the end-users except if the government is compelled by necessity to resort to it.
Keywords: Consumption tax, SST, GST, Imam al-Haramayn