Recording interest on late tax payment
27-7-2017 | IslamWeb
Question:
I am an accountant and I have my own accounting practice; one of the services I offer is to bring the tax payers up to date if they have not disclosed income before. In this service, after all calculations, we have to work out the tax liability as well as the interest due on the late payment with a government calculator. I wanted to know the following: is it permissible to work out the interest on the late payment with their calculator?
Answer:
All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.
It is impermissible for you to record the interest due on the late tax payment because this interest is prohibited interest, and recording interest is impermissible. Jaabir 
said, “The Prophet, sallallaahu ‘alayhi wa sallam, cursed the one who consumes interest, the one who pays it, the one who records it, and the witnesses to it, and he said, ‘They are all equal (in sin).’” [Muslim]
An-Nawawi 
wrote, “This is an explicit statement that prohibits recording the transactions of those who deal with interest or witness it because this constitutes cooperation in committing a sin.” [Sharh Saheeh Muslim, 11/26]
The Permanent Committee for Iftaa’ was asked:
“I work as an accountant in a commercial company, and this company is obliged to take usurious loans from the bank. I receive a copy of the loan contract to record the debt in company books. Am I considered a recorder of interest, and thus it is impermissible for me to work in this company? In other words, am I considered sinful for documenting the usurious contract although I am not the one who conducted it? Please advise; may Allah reward you well.”
The answer:
“It is not permissible to cooperate with the mentioned company in transactions involving interest, because the Prophet, sallallahu ‘alayhi wa sallam, cursed the person who accepts interest, the one who gives it, the one who writes it, and the two witnesses to it. He, sallallahu ‘alayhi wa sallam, said, 'They are equal (in sin).’ This is also evidenced by the general indication of the verse: {And cooperate in righteousness and piety, but do not cooperate in sin and aggression.} [Quran 5:2]”
Allah knows best.