Islamic concept of zakat. We shall discuss the principles of this institution set forth by the Qur’ān and Sunnah in three sections:
(1) The Nature of Zakat.
(2) The Heads of Zakat.
(3) The Rates of Zakat.
We now take up these in order:
(1) The Nature of Zakat
According to the Qur’ān, zakat has a dual nature: (a) intrinsic and (b) extrinsic.
(a) The Intrinsic Nature: Viewed thus, zakat is an act of worship. This is evident from a number of Qur’ānic verses in which it is mentioned adjacent to salat (prayer), the most important form of worship. The word ‘zakat’ means both ‘to purify’ and ‘to grow’: paying zakat purifys one’s wealth and soul, and it actually increases ones wealth in his afterlife. The Qur’ān stresses both these aspects of zakat:
“[O Prophet!] Take zakat out of their wealth---thou would cleanse them and purify them thereby.” (9:103)
and
“That which ye give in riba in order that it many increase on [other] people’s wealth has no increase with Allah; but that which you give as zakat, seeking Allah’s countenance, it is these people who will get manifold [in the Hereafter] of what they gave.” (30:39)
(b) The Extrinsic Nature: Viewed thus, it is the only tax an Islamic State can impose on its Muslim subjects
2. While declaring the requisites of citizenship of an Islamic State, the Qur’ān says:
“And if they repent [from all un-Islamic beliefs], establish salat and pay zakat, leave them alone.” (9:5)
The above verse clearly points out that salat and zakat are part of the public law of an Islamic State, and the only two things which an Islamic government can positively demand from its Muslim citizens. As far as zakat is concerned, after a Muslim has paid it to the government, not a single penny can be further exacted from him
3. This is further illustrated by the following two traditions
4:
“There is no [legal] share [for the society] in the wealth [of people] except zakat.” (Ibni Maajah: Kitab-uz-Zakat)
and
“After you have paid the zakat of your wealth you have paid [all] that was [legally] required of you.” (Ibni Maajah: Kitab-uz-Zakat)
In this regard, the severe warning sounded by the Prophet (sws) to those who impose taxes other than those ordained by the Almighty must also be kept in mind:
“No tax-imposer shall enter paradise.” (Abu-Daud: Kitab-ul-Khiraj)
(2) Heads of Zakat
The following Qur’ānic verse spells out the heads under which the zakat fund can be expended:
“Zakat is only for the poor and the needy, and for those who are ‘aamils over it, and for those whose hearts are to be reconciled [to the truth], and for the emancipation of the slaves and for those who have been inflicted with losses and for the way of Allah and for the wayfarers.” (9:60)
We take up these heads in order:
1) The Poor and Needy (Fuqaraa and Masaaqeen): The poor and the needy are the foremost recipients of zakat because they are the primary responsibility of the state. It must cater for their basic needs like food, clothing, shelter, health and education. In this regard, the Prophet (sws) is said to have said:
“It [ie zakat] should be taken from their rich and returned to their poor.” (Bukhari, Kitab-uz-Zakat)
2) The ‘Aamils over Zakat (‘aamileen-a-’alaihaa): Under this head, the salaries of all employees of the government including the head of the state can be paid.
3) Those whose hearts are to be reconciled (Muallafatul Quloob): Under this head come all forms of political expenditure in the interest of Islam. There may be many instances, when the affection of certain influential people must be obtained, particularly in border areas where their role can be decisive in the safety of a country. During the time of the Prophet (sws) many tribes were given money under this head to deter them from harming the newly founded Islamic State.
4) Slaves (riqaab): The institution of slavery was totally eliminated by Islam fourteen centuries ago. From this particular head money was given to free slaves. Today, by analogy, this head can be extended to include other recipients. For example, prisoners of war and other prisoners who are unable to pay the fine imposed by the courts can be freed by giving money through this head.
5) Those inflicted with losses (Ghaarimeen): Under this head, an Islamic system of Insurance can be established and all those who are inflicted with economic losses can be compensated. Whether rich or poor the real criterion is that their means of living and its role in the national economy have been destroyed. People who have acquired a loan and are unable to pay it back may also be helped from this money so that they may start afresh and the society can benefit from their abilities.
6) In the Way of Allah (Fee Sabeelillaah): Under this head defence expenditures of a state can be met and institutions for religious propagation as well as all works of public interest like roads, bridges, mosques, hospitals, educational institutions and libraries can be built.
7) The Wayfarer (Ibnussabeel): This implies the welfare of the wayfarer. Circumstances often make a traveller a needy person, in which case, his needs can be fulfilled from this head.
(3) Rates of Zakat
Before we mention the rates of zakat, a mention seems necessary of the items which are exempt from zakat. Nothing except the following three are exempt:
(i) Means of production: eg. tools, machinery etc.
(ii) Personal items of daily use: eg. personal belongings like, house, car etc
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(iii) A fixed quantity called nisaab.
However, an Islamic government can give ralaxation on any item in the interest of the public or because of any constraint in the collection of zakat on a particular item
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As far as the various rates of zakat are concerned, three distinct categories can be classified:
1. Wealth: After deducting the nisaab and taking into consideration other exemptions mentioned above, the wealth of a person, shall be taxed annually at the rate of 2%. Tax on trade capital shall also be levied at the same rate by considering this capital to be the sum of cash in hand and cash in trade.
2. Produce: Zakat on produce is deducted at the time of produce and depending upon the various items has three rates: 5%; 10%; 20%
i) 5%: On items which are produced by the interaction of both labour and capital: eg. produce from irrigated lands and industrial produce from factories
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ii) 10%: On items which are produced such that the major factor in producing them is either labour or capital, but not both. Examples of the former include an artist’s creation like paintings and the works of scholars and intellectuals, while examples of the latter include rented houses, and produce from rainy lands.
iii) 20%: On items which are produced neither as a result of labour nor capital but are actually a gift of God, eg treasure etc.
3. Animals: Only those animals which are bred and reared for the purpose of trade and business are subject to zakat. The details of the rates of zakat on animals can be consulted from any book of fiqh.
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This is the concept of zakat envisaged by the Qur’ān and Sunnah. From the above details it is clear that zakat is the only tax which an Islamic government can impose on its Muslim subjects
8 and that it is not merely a fund for the destitute. Moreover, since there is no basis for necessarily giving it in the possession of an individual (tamleek
9), it can be spent on the collective needs of the people as well.
However, after meeting the running expenses of a state, how the revenue needed for development should be obtained is an important question, and though it does not directly relate to our topic, yet keeping in view its profound importance, we end this dissertation while attempting to answer this question.
Revenue for Development
Before we proceed to answer this question, it is important to appreciate that Islam drastically reduces a major part of non-development expenditures of modern day states through a mandatory requirement for those in authority namely: their standard of living must be equal to that of a common man. Furthermore, Islam strictly enjoins the government to plan its expenditure according to its income. It totally forbids an economy which is based on debt, ie, planning a state’s expenditure beyond its income and covering the deficit through other means. However, in emergency situations, the state has a right to appeal to its public for money. Of course, this appeal will only have an effect if the government has established its credibility, and history bears witness that whenever a state whose rulers and administrators lived like commoners and administrated justice appealed for wealth in times of need people presented them with all the wealth they could spare.
In our opinion, the above stated regulation about those in authority, the total elimination of interest in the economy and the imposition of the true concept of zakat will not only generate enough money to meet the running expenses of the state but a considerable amount for development as well. However, a major part of the revenue for development would be obtained by means of all state owned enterprises whose management would be transfered to the private sector through either or both of the following two modes
10: (i) selling a certain quantity of shares to the private sector, (ii) imposing kharaaj (tribute) on the party of the private sector which is entrusted with the job of management.
