Tax Avoidance From The Perspective of Islamic Law
The Case of Sampit and Palangka Raya
Ali Murtadho Emzaed
1
1
Faculty of Sharia, IAIN Palangka Raya,Central Kalimantan, Indonesia
Keywords: Transfer Pricing, Islamic law, Hilah.
Abstract: Tax plays a central role in the economic system of modern states. Through taxation, a state attempts to gain
and increase its revenues to provide its people with public facilities and meet their need of public goods.
However, there are problems and challenges facing states in their attempts to collect tax from tax payers.
These include what so called “tax avoidance”, an attempt conducted by tax payers to reduce the amount of
tax payable to a state. It is problematic because tax avoiders are not regarded as to have breached law
whereas they have hindered the state from increasing its revenues. This has created a gap between the law
that aimed at gaining revenues for public interests and the practice of tax avoidance, which is lawful, but
contradictory to the aim of the law. This paper attempts to understand the practice of tax avoidance from the
perspectice of Islamic law. Based on qualitative data, it found that tax avoiders are motivated by bad
intentions and their conduct is considered as hilah according to the perspective of Islamic law.
1 INTRODUCTION
Taxes are the lifeblood of a state. A State can not
stand up straight and sturdy without being sustained
by taxes. This Adagium is true because within the
span of history of nation and state life, taxes not only
got theoretical justification, but also empirically has
been treated to all the people as taxpayers who
functioned as a source of state income, which is
destined as a source of state financing in welfare its
people (Muhammad and Ali, 2014).
Tax as an obligation imposed by the State to its
people, in the perspective of the Islamic State is a
religious duty which must be obeyed by all its
people. When the baitul mal (state treasury) derived
from the source of income - zakat (tax on Muslims),
jizyah (taxes charged to non-Muslims), fa'i (spoils of
war without war), ghanimah(spoils of war with war),
kharaj (non-Muslim landowner tax), 'usyr (non-
Muslim trade customs), and the khums, is
inadequate to finance the State budget, the State
must find another way to cover the financing
(Zallum,
1999). Another way is to set a tax. Tax is
a religious and State duty. Both personal taxpayers
and companies still consider that the tax is a burden
that should be borne, so reasonable if there are
taxpayers do not voluntarily pay taxes. Tax is a
burden that will reduce one's economic ability
(Reskino and Novitasari, 2013).
The phenomenon of the Panama Peapers scandal
involving hundreds of Indonesian businessmen
allegedly is a form of tax avoidance behavior by the
taxpayer. The Finance Minister said There is
potential for the property of taxpayer around Rp.
4,000 trillion, which has not been affected by the
tax. Approximately USD 1,400 trillion is a wealth of
pre-tax and remitted to the Directorate General
Taxation, while the remaining Rp. 2,700 trillion , is
property of Indonesian personnel that are stored in a
number of banks abroad
(Solihah, 2016).
Tax avoidance behavior by these taxpayers, in
the view of positive law (tax law) does not enter the
domain of violation of legal norms. tax avoidance is
an act that is not against the law, it is then utilised by
all taxpayers including corporate taxpayers, that as a
human is rational and opportunistic, to minimise tax
expenses. Moreover, big companies that are go
public are more focused on the interests of
shareholders than they have to pay taxes
(Kurniawan,
2017). Yet this behavior obviously has
eroded the State's income from the taxation sector.
There is a serious gap between the substance which
is the aim of law, namely to get the tax funds itself
Emzaed, A.
Tax Avoidance From The Perspective of Islamic Law - The Case of Sampit and Palangka Raya.
In Proceedings of the Annual Conference on Social Sciences and Humanities (ANCOSH 2018) - Revitalization of Local Wisdom in Global and Competitive Era, pages 163-169
ISBN: 978-989-758-343-8
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
163

with tax avoidance behavior that is considered not
contrary to the norm of law. Researchers look at this
issue from an Islamic law perspective based on
qualitative data.
2 TAX AVOIDANCE
The Great Dictionary of Indonesian (KBBI) means
the term "penghindaran" derives from the verb
"hindar" which means to abstain from; dodge; get
out of the way; filling; dodge to let go (KBBI,
2005). While in Oxford Advanced Learner’s
Dictionary of Current English; avoidance; the action
of avoiding somebody or something, tax avoiding;
arranging one’s affair so as to pay the smallest
amount of tax required by the law (As Hornby,
1995). The difference between tax avoidance and tax
evasion. According to Oliver Wendell Holmes, who
wrote
“When the law draws a line, a case is on one side
of it or the other, and if on the safe side is none
the worse legally that a party has availed himself
to the full of what the law permits. When an act
is condemned as evasion, what is meant is that it
is on the wrong side of the line “.
In theory, there are at least three types of tax
avoidance patterns, namely refraining from buying
goods that are taxable, transferring location or better
known as transfer pricing, and doing juridical
avoidance or known as tax planning. Transfer
pricing is one of the modes used by taxpayers to
avoid taxes. Transfer price in the context of the tax
legislation is the price at which one entity supplies
something (goods, services, the right to use tangible
or intangible assets, loans, guarantees and other fi
nancial transactions)to another associated entity...
This associated entity usually operates in different
countries and the transactions are therefore cross-
border. Sometimes associated entity engaged in
cross-border transactions can avoid the income taxes
of a country through their manipulation of Transfer
Pricing and then this entity would pay little or no tax
on their combined profits (Solilová and Sobotková,
2010).
They sell the price below the market price, so it
seems as though the company is losing money. If the
company is domiciled or has a subsidiary in
Indonesia, then Indonesia will suffer losses due to
reduced state revenues from corporate income tax.
The state suffered trillions of rupiah due to the
practice of transfer pricing companies in Indonesia.
The mode of transfer pricing is done by corporate
taxpayers by raising or lowering the price of goods
or services that can affect the amount of tax.
Companies that practice tax evasion can even
collude with fiscus elements to minimize or exempt
companies from paying taxes. This is the transfer
pricing in a negative sense
Transfer pricing is one of the modes used by
taxpayers to avoid taxes. They sell the price below
the market price, so it seems as though the company
is losing money. If the company is domiciled or has
a subsidiary in Indonesia, then Indonesia will suffer
losses due to reduced state revenues from corporate
income tax (Achmadiyah, 2013). The state suffered
trillions of rupiah due to the practice of transfer
pricing companies in Indonesia. The mode of
transfer pricing is done by corporate taxpayers by
raising or lowering the price of goods or services
that can affect the amount of tax. Companies that
practice tax evasion can even collude with fiscus
elements to minimize or exempt companies from
paying taxes. Transfer this pricing in a negative
sense.
Circular Letter of the Directorate General of
Taxation of the Republic of Indonesia number SE-04
/ PJ.7 / 1993 stated that there are several ways
multinational companies do engineering transfer
pricing to transfer tax burden to the country with low
tax rate (tax haven country). First, the selling price
(exports) is lower than the market price to
companies that are still in one group in the country
with low tax rates. Second, the purchase price
(import) which is higher than the market price by its
group companies located in the country with high
tax rates.
Third, the allocation of general administrative
costs tend to be high, such as remuneration for
technical services, and compensation for other
services, so that small profits and taxes paid are also
small. Fourth, the imposition of interest on loans by
overseas shareholders is usually to impose high
interest rates so that interest costs for the company
become small, so in this case there is a shift in
profits from high interest payments to parent
companies abroad.
Fifth, commission, license, franchise and royalty
payments are made at an unnatural amount that will
increase the company's cost and minimize profits,
but in essence there is a shift in profits from
subsidiaries to overseas parent companies. Sixth, the
purchase of company property by shareholders or
related parties that are lower than market price or
compared to purchases by companies that do not
belong to, a special relationship. The seventh, sales
to foreign parties through third parties who lack or
do not have the substance of the business. That is
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the definition of transfer pricing in a negative
sense.
While transfer pricing in a positive sense is the
transfer price by determining the price or reward in
connection with the delivery of goods, services or
transfer of technology between companies that have
a special relationship (Gunadi, 2007). Transfer price
has no purpose to avoid taxes, although he as a
taxpayer avoid paying taxes. Thus, the transfer
pricing in a positive sense is not discussed in this
research. Tax avoidance causes stagnation of
economic growth or economic turnover (Sutedi,
2013). The country suffers from a significant loss of
tax revenues such as the impact on Indonesia's
economic growth, not to mention the indirect
impacts that arise such as reduced funds / subsidies
from the government (Creswell, 2007).
3 TAXPAYER MOTIVATION TO
AVOID TAXES
This research was conducted in Sampit and
Palangkaraya Central Borneo by using the
respondent 12 taxpayers. This research includes
qualitative research. Qualitative research aims to
understand a particular study by investigating social
or human problems. Researchers create complex,
holistic images, analyze words, report the views of
informants in detail and in natural situations
(Creswell, 2007). So that researcher know the
motivation of taxpayers to avoid taxes. Researchers
use a pseudonym in describing the results of this
study.
Researcher has found the motivation Tax
avoidance made by the taxpayer is as follows:
3.1 The Low Awareness of Taxpayers
to Pay Taxes
Taxpayer awareness to pay taxes is an important
factor for the realization of tax compliance. At least
there are two aspects of awareness is meant here is
the awareness that the tax is a mandatory fee to the
state, that has been charged to him, that is used to
realize the welfare and public benefit. Another
aspect is the awareness of taxpayers to conduct good
bookkeeping on the activities of expenditure and
income of the company so that it can be known loss
and profit company. If the bookkeeping is not done
well then the taxpayer will not know the obligation
to pay taxes.
Wahyudi, age 39 years as a taxpayer has had an
attitude not concerned with the role and function of
taxes as state energy in the implementation of the
state. He has the perception that taxes are a burden
he has to bear. He said, “The tax is a burden on the
people he has to bear ... a little taxable ... whatever
all taxed ....” The same statement was also shown
by an informant named Fitri, 45 years- a taxpayer.
He expressed his reluctance to pay taxes by taxing as
a burden to bear. She said, “...s if it can not escape
from the bondage of taxes. To fulfill the needs of
everyday life has been taxed. We buy milk already
taxable, buy sugar, rice, everything is taxable.”
This statement is similar to Dwi, 53, an owner of
a company engaged in the field of Laundry. He
claimed taxes as a burden to bear. She said, “The tax
is a burden .. if it must choose not pay taxes I choose
not pay taxes ... I pay taxes, because I forced ...
everything taxed, eating ... drinking .. anyway all
taxable ... even layered .”
Indra, 37 years old. He perceives that taxes are a
burden. If he is allowed not to pay taxes then he will
not pay it. He said,“ pay the tax compliance that is
forced by state regulations .... if not forced to pay no
taxes ..... if it cannot pay taxes, then I will not pay
taxes ....”(Indra, 2017). Another informant, named
Oman, 44 years, said the same thing that
compliance pay taxes caused by the laws and
regulations that forced it (Oman, 2017). The same
answer is also given by a taxpayer named Beni, 46
years old. He said that taxes are the burdens required
by the state. A person paying taxes is not related to
religious orders. even the Islamic religion does not
require taxes. Then he challenged the researchers to
show a reference, that religion requires taxes..
While Agus, 35 years old who works as a trader
in” Pasar Besar Palangka Raya” do not pay taxes
because his business is not done in a bookkeeping of
income and expenditure well every day. He said, “.I
do not pay taxes on my merchandise sales revenue ...
I only calculate the daily income without proper
bookkeeping ... anyway ... there is money at the end
of the month to pay the debt to the bank and order
the goods back ..” This statement provides an
understanding that awareness to do well
bookkeeping on income and expenditure from
business activities is not done so that unknown
amount of taxes that should be paid.
The data obtained from the respondents above
gives us an understanding that the true taxpayers do
not realize that the taxes they are supposed to pay,
are used by the state to finance the public interest. It
is therefore not wrong when Benjamin Franklin
once said,” In this world nothing can be said to be
Tax Avoidance From The Perspective of Islamic Law - The Case of Sampit and Palangka Raya
165

certain, except death and taxes, "Wrote Benjamin
Franklin in his letter to Jean-Baptiste Le Roy in
1789. The phrase Benjamin Franklin is not
something exaggerated by analogizing the tax with
death, meaning that human life will not be separated
from death and taxes as a reality that must be
accepted. However, taxpayers may also seek tax
avoidance. But he must deal with the law, as a
consequence of the act of tax avoidance. Such an
attitude will always exist in the history of taxation,
along with the pure power theory on which taxation
is based. Although in the case of tax collection this
theory will take into account the community's
carrying capacity that is taxes levied, based on the
ability and strength of each individual community.
In Indonesia, this carrying power (daya pikul)
theory applies to taxpayers by indirectly imposing
income tax on all of its gross income, but its gross
income is reduced deductions-the costs regulated by
applicable legislation-and subsequently deducted by
non- taxable income. Non-taxable income(PTKP) is
tax- free income that has been established under
applicable tax laws. So that the taxpayer
experiencing a loss or income under PTKP then will
not be subject to income tax. In other words, this
theory underpins the obligation of the people to pay
taxes because it is based on a person's ability to pay
taxes. If the taxpayer is unable to pay the tax, then
he will not be taxed on it. that is justice in this
theory. Taxpayers who are able to pay taxes will be
subject to the tax burden and who are unable to bear
taxes will also not be taxed on them.
Even an informant named Yani 34 years who in
fact is a taxpayer is more concerned with the
financing of his family than for the benefit of the
State. Financing for the benefit of the family is more
needed and visible directly from tax. While an
informant named Rina, 40 years, a government
employee (PNS) admitted that he paid taxes as
required by the state. She said, “pay taxes because
the state obliges .. like me Government employees
have been cut first by the expense treasurer who is in
my office ... ". The informant's statement indicates
that the taxpayer does not have the awareness to pay
taxes even though he knows the tax is a liability, but
the detailed tax function does not know it. This low
awareness of paying taxes is shown by Vicky, 45,
the owner of Steel Company in Sampit who has not
sought good corporate regulation so that the
obligation to pay taxes on the state to be delayed. He
said, "No.. no ... I do not pay taxes but do not know
about taxes ... The fiscus will ever come to me, but I
am still busy so I can not ... so do not understand
about the administration of the company is difficult
to apply taxes ... but work orders are still quiet ....”
This situation is similar to informant named
Sonai, 39 years old, owner of leasing business in
Sampit. He claims that he has paid monthly taxes to
the tax office, but not based on the company's books
well. He said, "..they do not mean to avoid the tax
... but do not know which taxes are .... “. Taxpayers
who have bad awareness to pay taxes, in turn will
avoid taxes. They feel guilty when not paying taxes.
And as a good citizen should obey the principle of
tax obligations. Thus, the government needs to hold
programs that can educate the community such as
giving counseling, making jargon that is in nature
advocate taxpayers continuously. For example,
“wise people pay tax “; “Today does not pay tax
what the world says “and create other programs that
make taxpayers aware of taxes. As the results of
research conducted by Mohd Rizal Palil et.al., that
efforts to tackle the avoidance of tax one of them is a
tax authority to design the bestmechanism for
delivering the latest informa-tion on tax regulations
(i.e. advertisementsin the media, websites, brochures
and cus-tomer services desks) and also in
achievingits goals in deciding to change the
collectionsystem to one using a SAS. It is also
impor-tant for the tax authority to be kept
informedof taxpayers’ levels of knowledge so that
itcan effectively and efficiently communicate(i.e.
current changes in tax laws) and designtax policies
(for example, the tax rates, filing requirements,
penalties etc.) (Mohd Rizal Palil, 2016).
3.2 The Bad Taxation System
The system of taxation, especially relating to the
high low tax rates and the use of tax money. Is it true
that taxes are meant for the things that the tax should
be used, or taxes corrupted by tax officials who will
only enrich a single or group only. High tariff is a
factor taxpayers to make tax avoidance.
High tariff is a factor of taxpayers to avoid taxes.
This statement was obtained from an informant
named Holis, 45 years, work as a car workshop
entrepreneur with an estimated income of more than
hundreds of millions of rupiah. According to Law
no. 36 of 2008 concerning Income Tax article 17
that the taxpayer who has corporate income tax in a
year with taxable income (PKP) of 600 million
rupiah tax exposed 30% with layered system. When
he was asked how much tax was paid in a year, with
diplomatic answers he replied, “the most important
thing is to pay taxes .. regardless of the tax paid is
not so important..” The answer implies that the
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amount of tax paid does not really matter. This
means that a high tax perception becomes a taxpayer
factor for tax avoidance.
There are a series of cases that justify the public
perception of the bad tax system is a series of tax
cases involving tax officials (fiscus). For example
the case of Gayus Tambunan. Gayus Tambunan
people who had become famous because of some
behavior that he has done. Besides the name of
Gayus Tambunan, there is the name Dhana
Widiyatmika. He is a former government employee
at the Tax Service Office, Bahasyim Assifie - former
Head of Jakarta Tax Inspection and Investigation
Office Finance Ministry , Mohammad Dian Irwan
Nuqisra and Eko Darmayanto Also caught in the
same case-the former two Government Employee
Investigators (PPNS) of the Ministry of Finance.
The Supreme Court sentenced them to nine years in
prison. In addition there Tommy Hendratno is a
former Section Head of Supervision and
Consultation Office of Tax Sidoarjo, East Java. He
was proven to abuse his authority and accept bribes
of Rp. 280 million relating to the restitution or
overpayment of PT Bhakti Investama Tbk. The
Supreme Court sentenced him to 10 years in prison.
And there are many other cases.
Many cases of tax avoidance by taxpayers in
collusion with fiscus , increasingly distrust people to
pay taxes. In accordance with an informant named
Sudaryana, 47 years old. He was reluctant to pay
taxes because the tax money was corrupted a lot by
the tax officials. He said, “I think that paying taxes
is useless because it's only to enrich the tax people
...”(Sudaryana, 2017)
. The informant named Dwi,
53, says the same thing that high tax rates have
become the motivation of taxpayers to do tax
avoidance. She Said, “..yes ... the tax rate is high ..
and much corrupted by people like Gayus ... "
Thus, a good taxation system will affect the
taxpayer's interest. interest is shown taxpayers to pay
taxes, and be proof of tax compliance. However, if
the system is bad taxation will lead to bad taxpayer
response also. Responsible tax money management,
competent and non-corrupt fiscus, as well as
uncomplicated taxation procedures will make
taxpayers reluctant to avoid taxes. Continuously, if
the management of tax money is unclear, plus a
corrupt tax officer, it will make the taxpayer
dishonest, they will tend to avoid taxes.
3.3 The Government has Discriminated
against Taxpayers
This research also found the taxpayers' perception
that they were discriminated against by the
government. Discrimination treatment becomes an
important factor in tax avoidance. The
discriminatory treatment in question is the fiscal
exemption of foreign countries to certain taxpayers.
Should foreign fiscal exemption be given to all
taxpayers who already have a taxpayer ID number-
NPWP or who do not have a taxpayer ID number-
NPWP. In addition, there is a policy on zakat as a
tax deduction, valued as a discriminatory policy. The
enforcement of a tax-exempt policy only benefits
some taxpayers only. So that will result in jealousy
on the taxpayers who do not receive profits from the
policy. The effect is tax evasion. This means that
government discrimination is the reason for tax
avoidance.
The Government has enacted Law no. 11 Year
2016 on Tax Amnesty is considered by the public as
an unfair policy. Mr. Beni expressed his
disagreement with this Tax Amnesty. He said, “.Tax
amnesty ... I do not participate .... tax amnesty not
for people who are in the country ... but why can
target citizens in the country ... so I do not agree ..
tax policy amnesty unfair and wrong target...”.
Tax amnesty is a government policy to grant
amnesty to taxpayers in the form of the abolition of
tax payable, the abolition of administrative
sanctions, and the elimination of penal sanctions, on
assets acquired in 2015 or earlier that have not been
reported to the State by redeeming all tax debt owed
by the ransom that has been determined in
accordance with the period. The government's target
in tax amnesty policy is to expect entrepreneurs who
have kept their funds abroad voluntarily to
repatriate their funds to Indonesia-by paying the
ransom-and becoming compliant new taxpayers so
as to increase the future State tax revenue.
3.4 Tax Benefit
The motivation of the taxpayer to make further tax
avoidance is in the form of his desire to reduce the
amount of tax paid to the State. In the perspective of
the taxpayer, the tax is a burden obliged by the State
to the people who can reduce income every year.
This attitude is shown by an informant named Tito,
49 years old, a fiscus. According to him, people
doing tax avoidance is likely to feel affection for
taxes. Taxes that pay taxpayers can reduce earnings
every year. Taxpayers may do the tax avoidance
Tax Avoidance From The Perspective of Islamic Law - The Case of Sampit and Palangka Raya
167

mode by manipulating income data against tax
reporting to tax officials. He said, “taxpayers do tax
evasion because unfortunately for the money ...
taxes will reduce income every year .. the
perpetrators of tax avoidance usually from large
corporations ... may conspire with fiscus to calculate
the taxes....” This informant has informed the
researcher that the subject of tax avoidance by
reason of tax benefit is company having big income.
They asked the fiscus or the tax consultant to
calculate the amount of tax then do the reporting
engineering to the state so that the tax is lower than
it should pay. The taxpayer conducting engineering
tax report with the main motivation is the tax benefit
in the form of the difference between the amount of
tax he pays and the amount of tax he should pay.
Indonesia recognizes the Self Assessment system -
independent tax reporting system after the
government proclaims itself to carry out tax reform
in 1984 by abandoning the tax collection system
whose calculations are performed by the fiscus with
the official assessment system term.
The self assessment system has a high level of
risk to tax avoidance practices. A good taxpayer will
perform his duties as a good citizen. This taxpayer
will conduct calculations, reporting and tax
payments honestly in accordance with the income
earned in each year. On the contrary, taxpayers who
do not have good intentions, will manipulate their
income and net income data to obtain minimal tax
benefits or even be exempt from tax. Transfer
pricing mode has used tax avoidance by reason of
tax benefit.
An informant named Dwi, 53 years old -
business owner of Laundry. According to him the
mode of transfer pricing and tax planning is mostly
done by companies that utilize tax fiscus person. It is
the taxpayer who knows best the laws and
regulations as well as the tax calculations. He said, .
“I think ... many are doing tax avoidance ... if that
upsetting taxes is usually big companies, even
colluding with tax officials ......”
4 TAX AVOIDANCE IN ISLAMIC
LAW
Islamic law recognizes the term hilah. Ibn Manzhur
in Lisanu al'Araby defines hilah with al-tahawwul, a
special form of the meaning of the word al-tasharruf
wa al-a'mal which means a change of law from one
condition to another. While the jama (singular) 'form
of this hilah is al-hiyal. While the Big Indonesian
Dictionary called it with the term kilah which is
defined as trickery, deceit, excuses, artificial
excuses. According to the terms in the book of
Mausu'a fiqhi Umar Ibni al-Khattab RA, Al-Qa'ahji
defines hilah is showing the action of the outer
dimension is allowed but will have the ultimate goal
of breaking the shara law by bringing it to the
different realms of law.
Ibn Qayyim al-Jauzi defines that hilah is looking
for a way of deceit by not showing that its true
purpose is that it is forbidden. While According to
al-Syathibi, an attempt to perform a practice which
in fact is allowed, to abrogate other shara law (al-
Syathiby, 1999).
Some of the definitions mentioned above can be
concluded that hilah is to create a legal state in order
to justify a certain law which is actually harm,
although in fact it is allowed. there is something
hidden, and trying to divert from a law to another
law.
There are two kinds of “hilah” in the literature of
Islamic law, namely “hilah mashru'iyyah-the kind
of hilah is allowed in Islamic law” and “hilah ghairu
mashru'iyyah- the kind of hilah is not allowed in
Islamic law”. In the Qur'an contains examples of
these two types of “hilah”. Problems arise when
faced with problems-if there is an attempt to avoid
religious obligations-but text is not found in the
Qur'an and Hadith. Shafi'i, Maliki, Hanbali have
declared that the use of hilah is harm and
absolutely forbidden (Ayub, 2009). And Abu
Hanifah tends to accept hilah as an attempt to avoid
the law. Nevertheless, Abu Hanifah does not make
easily to using of hilah. Hilah containing prejudice
and makruh- is an act that should not be done by
someone” is prohibited. Moreover, it clearly has the
intention to cancel the rules of shar'i law (The
Quran and Hadith).
Tax avoidance by transfer pricing mode in the
negative sense of transferring the price of goods or
services to an affiliated company, with the mode of
selling the price below the market price that seems
to suffer a loss. So the main objective is to avoid and
even free domestic taxes, enlarge the profits earned
by the company is clearly conducting sales
engineering. It is a form of tyranny to the state.
“Hilah” or engineering of this price transfer behavior
is forbidden by Islamic law. Paying taxes is a
religious obligation as justification of the legality of
the State in levying taxes on its people, whether
based on the Qur'an, Hadith, or Masahah Mursalah
(public interest).
The act of hilah or engineering to conduct a sale
transaction of goods or services to an affiliated
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company with the same or lower price is
permissible. But the deed if the main motive is to
avoid taxes will be prohibited. Because it implies
that tax payers avoid taxes intentionally. Whereas
the role and function of the tax is vital in financing
the implementation of the State in the context of
implementing the common good (maslahah
lilummah). In contrast to transfer pricing in a
positive sense, ie transferring prices to an affiliated
group of companies in order to perform performance
evaluation, management motivation, price control,
and market control (Zain, 2003) and no tax benefit
found. At least As-Shathiby notes there are 3 things
(Al-Syathiby, 1999) that cause hilah like this is
prohibited. First, the motive for doing hilah is
clearly contrary to Allah and His Messenger as law-
makers. Paying taxes is a religious obligation, then
taxpayers do engineering such that it seems to suffer
a loss and avoid paying taxes.
Second, the act of hilah will result in greater
damage. Yet, the act that causes damage is
something that is forbidden by religion. Taxes are
used by the State for the administration of the State
in enforcing the common good. If the State fails in a
tax collection effort, then from which the State may
finance the expenditure of the State. It will certainly
cause damage. Third, hilah seeks to abolish the law
which actually applies to it, but the addition of terms
or the reduction of the conditions, thus causing a
conflict with the Shari'ah. To engineer the sale of
goods or services as if the loss to an affiliated
company with the intention of being exempt from
tax shall mean waiving the law which actually
applies ie the obligation to pay tax. Obviously this
behavior is against the shari'ah..
5 CONCLUSIONS
At least there are 4 motivations someone do the
tax avoidance in the empirical level. First, the low
awareness of taxpayers to pay taxes, Second, the
bad tax system, third, discriminatory treatment of
taxpayers and forth, the reasons for tax benefit.
Behavior to manipulate the transfer pricing of
goods that seems to lose money to the company
affiliated with the motivation to avoid tax is the act
that belongs to the category of ghairu masyru'ah in
the perspective of Islamic law is something
forbidden (haram). Because the behavior is not
oriented to public interest (maslahah lil ummah)
and contrary to the function and purpose of the tax.
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Tax Avoidance From The Perspective of Islamic Law - The Case of Sampit and Palangka Raya
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