Question:-
1. Is it permissible for an accountant to calculate income tax for individuals and submit such returns to SARS, in lieu of a fee?
2. Keeping in mind that clients are sometimes required to pay interest to SARS, whilst at other times their accounts are credited with interest fund, will this make a difference to the ruling?
3. Is there any leeway in terms of Shariah (for me as an accountant) to record less than the actual VAT received by clients?
4. Many clients are involved in interest-based transaction with the banks. Rasulullah Salallahu Alaihi Wasallam has cursed the person that records interest bearing transactions. Am I, as an accountant, permitted to work with bank statements which include interest payments to their financial institutes?
Answer:-
1. The client has hired your services as an accountant to calculate the income tax due on his earnings and to submit returns on his behalf. There is no harm in offering such a service to the public in lieu of a fee since submitting returns to the revenue is a legal requirement for all citizens.
2. You are simply submitting the return on behalf of the client. The imposing of penalties and interest charges or crediting interest to the client’s account is an independent matter between SARS and the client. The client should ensure that he pays timeously and correctly to avoid being penalized. Similarly, he should dispose of all interest funds accrued in the correct avenue and as required in Shariah.
3. As far as VAT is concerned, the client / shopkeeper acts as an agent on behalf of the government to collect the VAT from the customers, hence the VAT collected should be paid in full. In regards to income tax, there is some leeway to understate the income amount.
4. The warnings that have been cited in the Hadith are with regards to recording interest-bearing transactions. In this instance, you are simply calculating the tax returns on behalf of the client. The interest-bearing transactions have already been recorded in the past (when the transaction was enacted) and these records have been placed before you in the form of a bank statement for auditing purposes, hence, writing the books will be acceptable.
ALLAH TAÁLA KNOWS BEST!
ANSWERED BY:
Mufti Mohammed Desai
Date: 09 Jumad-al-Ula 1443 / 14 December 2021
