Tax free government bonds

16-9-2007 | IslamWeb

Question:

Bangladesh is a poor muslim country.For this, govt has made a provision of a bond for foreign job holders to invest their money where the bond holders will be excused of annual tax. at the end of apecific year, govt eill give good amount of benefit at a specific rate.Now,if you ask that wheather govt invest this money for business or not and from their they give benefit or not,then it is very difficult to say. Because, this country remains on debt to worlld bank,imf etc to feed its people.Is the interest haram only for its fixed rate or for the purpose also? can we invest our foreign money in this project for the welfare of the state? otherwise, people will invest this money privately by making house or some other projects by which country will not be benefitted.Please answer in this perspective.

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

 

If the government exploits the money of the workers who work abroad and gives them a profit percentage agreed upon in advance, then it is lawful in the condition that the capital holders should take part in the loss if any.

But if their money are exploited as guaranteed sums in return for profit or interest whether fixed or otherwise, and whether these sums of money were invested in lawful or unlawful things, then it is prohibited as it is in fact a loan with interest, which is Ribaa. See Fatwa 90870.

It must be well-known that one of the reasons behind spreading poverty, economical crises, and the lack of bliss is the establishment of projects dealing with Ribaa. Saying that they benefit the country is a mere illusion and spoiled fantasy, which must be avoided.

Allaah Knows best.