Short answer
No. Income tax, council tax, VAT and other government taxes are not zakat, even if you intend them as zakat, because they do not go to zakat's recipients as their own. You still owe zakat in full. Tax you owe and must pay now does count as a debt that reduces your zakatable wealth.
Taxes taken by a state that does not collect them as zakat do not discharge zakat. Where a Muslim government collects zakat as zakat and spends it on its proper recipients, what it takes counts. Tax that is due is a debt and is subtracted before working out zakat.
The four schools agree on this.
Explanation
Zakat and tax are different in kind. Zakat is worship: it needs the intention of zakat, has fixed recipients in Quran 9:60, and must become the property of eligible people. Tax is a civic obligation spent on roads, schools, defence and much else. Paying tax does not meet any of zakat's conditions, so the four schools agree it does not replace zakat.
Both are owed. Muslims living under a fair tax system should pay their taxes (see do Muslims have to pay taxes) and pay their zakat separately.
Tax still affects your zakat in two ways:
- Tax due now is a debt. If you have a tax bill to pay, such as a self-assessment bill, subtract it from your zakatable wealth (see debts and zakat). Future tax on income you have not earned yet is not subtracted.
- Tax relief on zakat. In some countries, zakat paid to a registered charity is tax-deductible, or the charity can claim extra on it, as with Gift Aid in the UK. You may claim this. The extra is the government's, not part of your zakat.
Where a Muslim state collects zakat as zakat, such as on companies in Saudi Arabia or from bank accounts in Pakistan, what it takes counts as zakat for those it is taken from. Older Hanafi texts also discussed whether money taken by unjust rulers could count if the owner intended zakat. Contemporary Hanafi muftis do not apply that discussion to ordinary modern taxes. Ask a mufti if you live under a zakat collection system.
The evidence
Quran, Surah At-Tawba 9:60
۞ إِنَّمَا ٱلصَّدَقَٰتُ لِلْفُقَرَآءِ وَٱلْمَسَٰكِينِ وَٱلْعَٰمِلِينَ عَلَيْهَا وَٱلْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِى ٱلرِّقَابِ وَٱلْغَٰرِمِينَ وَفِى سَبِيلِ ٱللَّهِ وَٱبْنِ ٱلسَّبِيلِ ۖ فَرِيضَةًۭ مِّنَ ٱللَّهِ ۗ وَٱللَّهُ عَلِيمٌ حَكِيمٌۭ ﴿٦٠﴾
Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah. And Allah is Knowing and Wise.
Zakat has its own recipients, which taxes do not follow.
Sahih al-Bukhari 1395
Sahih... تؤخذ من أغنيائهم وترد على فقرائهم ...
"It is taken from their rich and given back to their poor."
Zakat is a transfer from the rich to the poor, not a general levy.
Where the ruling is recorded
- Radd al-Muhtar, Kitab al-Zakat, on what rulers take from people's wealth. Discusses when money taken by rulers counts as zakat.
- Radd al-Muhtar, Kitab al-Zakat, chapter on the zakat of wealth, on debts that prevent zakat. Debts owed to people with a claimant reduce zakatable wealth.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.