ISLAMABAD – Council of Islamic Ideology (CII) Chairman Maulana Muhammad Khan Sherani Wednesday said that indirect taxes are contradictory to the teachings of Islam and prohibited in Sharia.

“Taxes can be imposed only on income,” Sherani said while addressing a press conference at the end of a two-day seminar on Islamic system of economy.

The CII chief maintained that tax cannot be collected from the end consumers on the purchase of a product instead it should be collected from the industrialist and traders.

“The end consumer is the ultimate sufferer of indirect taxes,” Sherani said adding that tax must be collected from industrialist and traders on sale of a product as they are the beneficiary who are earning from it.

The economic system based on paper currency is not strong enough and gold is the more acceptable medium, he added. “The paper currency is only based on the power of the state has and no standing in the shape of a solid material.”

“The gold dinar coin was used in the Islamic world from the 8th century onwards and survived in certain parts till 19th century,” Sherani said.

The CII chairman said capitalism is about to fall after the collapse of communism and the world must opt for Islamic economic system to meet the challenges confronting the economy.