Q: Can I reduce my tax liabilities through lying, as Islamically we are entitled to whatever we earn?
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
A: If the revenues of the state are not sufficient to meet its expenditure needs a tax may be levied on the population provided it is proportionate to the need.
One may avail of tax mitigating structures provided one does not lie or is not fraudulent. Thus, one may appoint a sister or mother as a secretary in the manner that is sanctioned by the law. This would include paying them for services rendered by them and could replace any other monies normally advanced to them. However, if no services are agreed nor any remuneration advanced, one cannot present such person as his/her employee.
In short, provided one does not lie or commit fraud, one may avail of any permitted tax mitigating structure.