'Carosel'/VAT Fraud

[zaid_ibn_ali]

Seems very popular nowadays with people making huge sums of money from it. What is the Islamic ruling on it?

[Abu Treika]

its stealing akhi, carosels involved making transactions for goods that arent physically there, they invoice for the goods, claim the vat back and make money for nothing, pure fraud IMO, the exact islamic ruling i dont know akhi..

[zaid_ibn_ali]

I understand there's more than one method. There's someone I know who says its Halal, at least the VAT thing he is talking about. That method I think is where they buy goods from abroad and sell them in this country with VAT added to them (as is the law here), but they don't pass the amount they collected in VAT on to the government. They just keep it. This is where they make huge sums of money (17.5% on each item, usually in large quantities). The guy says they dont pass the VAT on to the government, it don't matter because its not an islamically obliged tax.

What concerns me is that surely this is wrong and haraam. Regardless of one believes it is halal or haraam to pay tax to the government.

Any thoughts?

[Abu Treika]

I understand there's more than one method. There's someone I know who says its Halal, at least the VAT thing he is talking about. That method I think is where they buy goods from abroad and sell them in this country with VAT added to them (as is the law here), but they don't pass the amount they collected in VAT on to the government. They just keep it. This is where they make huge sums of money (17.5% on each item, usually in large quantities). The guy says they dont pass the VAT on to the government, it don't matter because its not an islamically obliged tax.

What concerns me is that surely this is wrong and haraam. Regardless of one believes it is halal or haraam to pay tax to the government.

Any thoughts?

they have to lie to the government and technically when that product is sold to the consumer, they pay VAT so that it goes to the government, not in the pockets of the supplier, if these brothers wanted to avoid paying taxes they wouldnt take the vat from the consumer would they?

[zaid_ibn_ali]

true. All this white collar crime business is so shady. The people who do the 'petty blue collar' crime are made out to be dirty criminals, yet the rewards they gain from their crimes are only a fraction of what these so called reputed businessmen make!

[asharee_salafi]

sounds like you been chatting to HT..........lol