بسم الله الرحمن الرحيم
Questions often arise regarding taxation and payment of it; the following is a question posed to Shaikh al-Fawzan on the issue:
Q: “I live in a country that takes taxes from us, and unfairly, so is it allowed for me to pay them using interest money?”
A: “Why are you involved in interest in the first place?! Are you engaged in taking interest so you can pay the taxes! This is not permissable, this is haraam. If they compel you to pay taxes then pay them – and return your affair and complaint to Allah – and the sin is upon them, you need to free yourself from punishment [i.e additional fines etc in the case of non-payment], you are compelled to pay the taxes. As for involving yourself in interest and then saying you wish to pay the taxes with it!?… [then this is] cleaning an impurity with another impurity! This is not permissible”.