Initially, after the first Muslim conquests in the 7th century, kharaj usually denoted a lump-sum duty levied upon the conquered provinces and collected by the officials of the former Byzantine and Sassanid empires or, more broadly, any kind of tax levied by Muslim conquerors on their non-Muslim subjects, dhimmis. At that time, kharaj was synonymous with jizyah, which later emerged as a poll tax paid by dhimmis. Muslim landowners, on the other hand, paid only ushr, a religious tithe, which carried a much lower rate of taxation.
However, the mass conversion of subjugated Christians and Zoroastrians to Islam eroded the tax base of the Arab empire. On top of that, a large, but unsuccessful, expedition against the Byzantine Empire undertaken by the Umayyad caliph Sulayman in 717 brought the finances of the Umayyads to the brink of collapse. Even before Sulayman's ascent to power, Al-Hajjaj, a governor of Iraq, attempted to raise revenues by demanding from Muslims a full rate of taxation, but that measure met with opposition and resentment. To address these problems, Sulayman's successor Umar II worked out a compromise that beginning from 719, land from which kharaj was paid could not be transferred to Muslims, who could lease such land, but in that case, they would be required to pay kharaj from it. With the passage of time, the practical result of that reform was that kharaj was levied on most land without regard for the cultivator's religion. The reforms of Umar II were finalized under the Abbasids and would thereafter form the model of tax systems in the Islamic state. From that time on, kharaj was also used as a general term describing all kinds of taxes: for example, the classic treatise on taxation by the 9th century jurist Abu Yusuf was called Kitab al-Kharaj, i.e. The Book On Taxation.
A comparison between pre-Islamic documents and those of the Islamic period reveals that conquering Arabs increased the land taxation without exception. Thus, raising taxes of each acre of wheat field to 4 dirhams and each acre of barley field to 2 dirhams, whereas during reign of Khosro Anushiravan it used to be a single dirham for each acre of a wheat or barley field. During the later stage of Umayyad Caliphate, conquered and subjugated Persians were paying from one fourth to one third of their land produce to the Arab Empire as kharaj.
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