I am pretty sure, I heard a couple of days ago Sheikh Imran Hossein, telling in a youtube video, that under normal circumstances, there's no tax, except if and when a special situation arises, like war, then you can collect extra tax for that.
Can an Islamic State Levy Modern Taxes?
Can an Islamic state impose taxes such as Wealth tax, Income tax, Customs Excise, Sales tax, Gift tax, Capital Gains tax, Property tax, etc., on its Muslim citizens in addition to Zakat? This question is being hotly debated these days.The issue cannot be resolved easily since there are no clear instructions either in the Qur’an and the Sunnah in the favour of or against the proposition under debate. Some people argue that an Islamic state cannot charge taxes besides Zakat from its Muslim subjects, while others are of the opinion that the State, in case of need, is well authorised to levy taxes in addition to Zakat.
However the study of the Qur’an, the Ahadith and the practice of the Prophet of Islam, the conventions of right-guided caliphs, the opinions of the jurists of Islam and the experience of states through history reveals that some sort of justification can be found enabling the Islamic state to impose extra-Shariah or worldly taxes in addition to Zakat for funding emergency needs and for meeting the huge expenses of its welfare functions. Such justification has been found by the scholars on the following grounds:
1. The activities of a modern Islamic state have expanded, like any other modern state, due to socio-economic changes brought about by the industrial revolution and the progress made in science and technology. In addition to performing the traditional functions of a conventional state, a modern state is expected to provide socio-economic infrastructure for industrial development, education and medical relief, means of communication and transport, employment and civil amenities, etc. Thus, the need for finances has increased for meeting the huge expenses on newly assumed manifold responsibilities by the state. But on the other hand, the sources of finance like Khums on spoils of war, Fai, Kharaj and Jizyah etc. which were available to the early Islamic state are no longer available to a modern Islamic state. So a modern Islamic state has to impose taxes to supplement its Zakat revenues for meeting its ever-growing expenses.
2. The Qur’an prescribes the heads of expenditure of Zakat funds of an Islamic State when it says: “The alms are only for the poor and the needy and those who collect them and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarers…..” (9:60). Thus, the Zakat revenues can be applied by the Islamic state only on the expenditures enumerated by the Qur’an. It has no discretion to utilize Zakat funds on the heads of expenditure other than listed by the Qur’an. Therefore, the government of an Islamic state has to impose taxes in order to meet its expenses other than those to which Zakat revenues can be applied.
3. In another verse, the Qur’an says: “It is not righteousness that ye turn your faces to the East and the West: but righteous is he who believes in Allah and the last day and the Angels, and the Scripture and the Prophets and giveth his wealth for love of Him, to kinsfolk and to orphans and the needy and wayfarer and to those who ask, and to set slaves free; and observeth proper worship and payeth the poor due (Zakat)……..” (2:177). This verse of the Qur’an is making the rich liable (in addition to the payment of Zakat) to spend their wealth for their kinsfolk, for orphans, for the poor and the needy and also for the emancipation of slaves and assistance to the wayfarer. Many jurists see in this verse a clear authority enabling the Islamic state to impose taxes in addition to Zakat for the purpose of meeting its expenses on such welfare activities.
In yet another verse, the revealed book of Islam ordains: “And they ask thee what they ought to spend. Say: That which is superfluous” –(2:219). From the world “afw” (superfluous) used in this verse, many scholars like Maulana Maududi understand that it provides clear scope for taxation besides Zakat.
4. There is a well known Hadith which says: “There are other claims too on the wealth of a person besides Zakat.” This Hadith is interpreted by the scholars to authorise the Islamic state to impose taxes besides Zakat when the state needs funds for its expenditures. Moreover, the Nisab and rates of Zakat have been prescribed by the Prophet of Islam and the same cannot be changed, according to the opinion of many of the jurists. Thus, the Zakat revenues cannot be increased beyond a certain limit and, therefore, are unable to meet the ever-growing expenses of the state. Therefore, the state will have to explore additional sources.
5. The early jurists of Islam have unanimously held that the Islamic state can impose extra-Shariah taxes or compulsory contributions (whom they call Nawa’ib) in case of emergency needs like war, flood, earth-quake, cyclone, outbreak of epidemic, etc. The Holy Prophet himself asked for contributions for the Battle of Tabuk and his companions even contributed all of their belongings.
6. History bears witness to the fact that taxes in addition to Zakat were levied even in the early period of Islam. Hadrat Umar imposed duties on imports which were called Ushur in those days. He also included the horses (which had not been subjected to Zakat in the time of the Prophet) in the list of properties chargeable to Zakat.
7. It is a cardinal principle of Islamic Jurisprudence that anything which is for the welfare of the Muslim Ummah can be done provided it is not explicitly prohibited by any Injunction of the Qur’an and Sunnah and it also does not violate any tenet of Islam. Thus, the Islamic state can impose taxes to augment its Zakat revenues for the welfare of the Ummah provided in doing so no Injunction of Islam is violated.
Chapter 13: Fundamentals of Islamic Economic System by Dr. Muhammad
Sharif Chaudhry
enjoying the comments and post from the Respected members 
