Withholding tax on bank transactions declared un-Islamic

The Council of Islamic Ideology (CII) on Wednesday declared that withholding tax on the withdrawal or transfer of money from banks is un-Islamic.

The council stated that deducting tax on one’s own money has no reasonable justification in Shariah.

“While working within the framework of the Quran and Sunnah, we were asked to tell us that paying withholding tax on your own money in the bank is un-Islamic. There is no reasonable reason for this. It is not permissible to deduct this amount in any way,” Dr. Naeemi explained.

The ruling could have far-reaching implications for Pakistan’s financial system, where withholding tax has been a controversial source of government revenue.

Rejection of Diyat bill amendment

The CII rejected the proposed amendment in the Diyat law, which had excluded silver and made gold the sole standard for blood money compensation.

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The council stressed that Shariah-prescribed amounts of Diyat—gold, silver, and camels—must be retained in the law, declaring the proposed amendment “un-Islamic.”

Guidance on insulin

Discussing medical ethics, the council advised that insulin containing pork components should be avoided by diabetic patients if halal alternatives are available. This aligns with previous rulings urging Muslims to use permissible options in medicine whenever possible.

Reservations on Supreme Court ruling

The meeting also expressed serious reservations over a September 11 Supreme Court decision that made iddat (waiting period) and maintenance mandatory for an unmarried woman in the event of divorce. The council ruled that such a condition is contrary to the Quran and Sunnah.

Conditional permission for human milk banks

The CII allowed for the establishment of human milk storage institutions under specific conditions. However, it emphasized that mandatory legislation must be enacted first to ensure safeguards against misuse, and the council must be included in the process.

Additional decisions

• The council recommended immediate cleaning of Holy Quran copies used for testimonies that may contain impurities, and called for legislation to address this.

• It agreed to the Ministry of Religious Affairs’ proposal to develop a Rabi-ul-Awwal ringtone reminding citizens to respect banners, flags, and pennants carrying holy inscriptions.

• The council also reviewed the blasphemy case against Mirza Muhammad Ali Engineer, based on an FIA Cyber Crime Wing letter.