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The Qur'an talks about the zakat in more than 30 different verses, mainly in the [[Medinan sura]]s. In the Qur'anic view, zakat is a way to redistribute the wealth, thus increasing the flow of cash in the economy with a particular interest in the poor and the dispossessed Muslims. However, zakat is considered more than taxation - one must give zakat for the sake of one's salvation. Non Muslims are not required to pay zakat but give a tax by a different name called Jizyah tax. Neglecting to give zakat can result in damnation in the afterlife, while those who give zakat can expect reward from God in the afterlife. The giving of the zakat is considered a means of purifying one's wealth and one's soul.<ref name=Heck>Heck, Paul L. "Taxation." ''Encyclopaedia of the Qur'an''</ref>
The Qur'an talks about the zakat in more than 30 different verses, mainly in the [[Medinan sura]]s. In the Qur'anic view, zakat is a way to redistribute the wealth, thus increasing the flow of cash in the economy with a particular interest in the poor and the dispossessed Muslims. However, zakat is considered more than taxation - one must give zakat for the sake of one's salvation. Non Muslims are not required to pay zakat but give a tax by a different name called Jizyah tax. Neglecting to give zakat can result in damnation in the afterlife, while those who give zakat can expect reward from God in the afterlife. The giving of the zakat is considered a means of purifying one's wealth and one's soul.<ref name=Heck>Heck, Paul L. "Taxation." ''Encyclopaedia of the Qur'an''</ref>


Giving of taxes to Muslims(which includes zakat) is also part of the primordial covenant between God and humankind.{{Cite quran|2|83}}<ref name=Heck/>
Giving of taxes to Muslims (which includes zakat) is also part of the primordial covenant between God and humankind.{{Cite quran|2|83}}<ref name=Heck/>


The Qur'an lists the beneficiaries of zakat (discussed [[Zakāt#Recipients|below]]).<ref name=Zysow/>
The Qur'an lists the beneficiaries of zakat (discussed [[Zakāt#Recipients|below]]).<ref name=Zysow/>

Revision as of 15:59, 22 December 2012

This is a sub-article of Islamic economic jurisprudence.
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Zakāt (Arabic: زكاة [zæˈkæː], "that which purifies"[1]), is the giving of a fixed portion of one's wealth as a tax, generally to the poor and needy or to the people who collect it. It is one of the Five Pillars of Islam.

Source texts

The zakat, one of the pillars of Islam, is discussed in both the Qur'an and the hadith literature.

Qur'an

The Qur'an talks about the zakat in more than 30 different verses, mainly in the Medinan suras. In the Qur'anic view, zakat is a way to redistribute the wealth, thus increasing the flow of cash in the economy with a particular interest in the poor and the dispossessed Muslims. However, zakat is considered more than taxation - one must give zakat for the sake of one's salvation. Non Muslims are not required to pay zakat but give a tax by a different name called Jizyah tax. Neglecting to give zakat can result in damnation in the afterlife, while those who give zakat can expect reward from God in the afterlife. The giving of the zakat is considered a means of purifying one's wealth and one's soul.[2]

Giving of taxes to Muslims (which includes zakat) is also part of the primordial covenant between God and humankind.[Quran 2:83][2]

The Qur'an lists the beneficiaries of zakat (discussed below).[3]

Hadith

The hadith also admonish those who don't give the zakat. According to the hadith, refusal to pay zakat is a sign of hypocrisy, and God won't accept the prayers of such people. The hadith assert that the poor wouldn't be hungry if the rich gave zakat. But they also state that zakat purifies those who give it. Those who give zakat, God safeguards their property from ruin. On the day of Judgment, those who didn't give the zakat will be held accountable and punished.[3]

Various legal aspects of the zakat are discussed in the hadith: the types of properties that are zakatable, the minimum quantity that is zakatable (the nisab), the rate of zakat and the rule of one-year holding period.[3]

The hadith contains advice on the state-authorized collection of the zakat. The collectors are required not to take more than what is due, and those who are paying the zakat are asked not to evade payment. The hadith also warn those who take zakat to which they are not eligible to receive (see beneficiaries of zakat) of punishment.[3]

Early Islamic history

Zakat, a practice initiated by the Islamic prophet Muhammad, has played an important role throughout Islamic history.[4]

The caliph Abū Bakr, believed by Sunni Muslims to be Muhammad's successor, was the first to institute a statutory zakat system.[5] Abu Bakr established the principle that the zakat must be paid to the legitimate representative of the Prophet's authority. Abu Bakr also ensured that each man, woman and child had a minimum standard income of 10 dirhams annually, later increased to 20 dirhams.[4]

The second and third caliphs, Umar ibn Al-Khattab and Uthman ibn Affan, continued Abu Bakr's codification of the zakat.[4] Uthman also modified the zakat collection protocol, by decreeing that only "apparent" wealth was taxable, which had the effect of limiting zakat to mostly being paid on agricultural land and produce.[6] During the reign of Ali ibn Abu Talib, the issue of zakat was tied to legitimacy of his government. After Ali, his supporters refused to pay the zakat to Muawiyah I, as they did not recognize his legitimacy.[4]

Ultimately, the practice of state-administered zakat was short-lived in the early Islamic history. During the reign of Umar bin Abdul Aziz (717–720 A.D.), it is reported that no one in Medina needed the zakat. After him zakat came to be considered more of an individual responsibility.[4]

Practice

Taxation in the Ottoman Empire
Taxes
Implementation

Zakat is one of the five pillars of Islam, and is expected to be paid by all practicing Muslims who have the financial means (nisab).[7] In addition to their zakat obligations, Muslims are encouraged to make voluntary contributions (sadaqat).[8] The zakat is not collected from non-Muslims, although they are sometimes required to pay the jizyah tax.[9][10]

Amount

The amount of Zakat to be paid by an individual depends on the amount of wealth, and the type of assets the individual possesses. The Quran does not provide specific guidelines on which types of wealth are taxable under the zakat, nor does it specify percentages to be given.[citation needed] The amount of zakat to be paid on capital assets (e.g. money) is 2.5% (1/40).[11] Zakat is additionally payable on agricultural goods, precious metals, minerals, and livestock at a rate varying between 2.5 (1/40) and 20 percent, depending on the type of goods.[12][13] Zakat is separate from the practice khums, where Shi'ites are additionally expected to pay one fifth of their income.[14]

Zakat is only payable on assets continuously owned over one lunar year that are in excess of the nisab, a minimum monetary value. The nisab is calculated after adding the cash value of zakatable assets (gold, silver, cash, stocks, merchandise for business, livestock etc.). Personal assets such as clothing, household furniture, one residence etc. are not considered zakatable assets. The nisab for gold and other money is the value of 85 grams of gold at world prices. Thus, at 2012 prices, the nisab for such assets was USD $ 5,200.[11]

Collection

Today, in most Muslim countries, zakat is collected through a decentralized and voluntary system, where eligible Muslims are expected to pay the zakat based on worship and love of God.[15] Under this voluntary system, zakat committees are established, which are tasked with the collection and distribution of zakat funds.[16] In a handful of Muslim countries – including Saudi Arabia, and Pakistan – the zakat is obligatory, and is collected in a centralized manner by the state.[15][17] In Jordan, Bahrain, Kuwait, Lebanon, and Bangladesh, the zakat is regulated by the state, but contributions are voluntary.[18]

Recipients

There are eight categories of people (asnaf) who qualify to receive zakat funds, according to the Quran:[19][20]

  1. Those living in absolute poverty (Al-Fuqarā')
  2. Those who were restrained because they cannot meet their basic needs (Al-Masākīn)
  3. The zakat collectors themselves (Al-Āmilīna 'Alaihā)
  4. Non-Muslims who are sympathetic to Islam or wish to convert to Islam.(Al-Mu'allafatu Qulūbuhum)
  5. People whom one is attempting to free from slavery or bondage. Also includes paying ransom or blood money (Diyya). (Fir-Riqāb)
  6. Those who have incurred overwhelming debts while attempting to satisfy their basic needs (Al-Ghārimīn)
  7. Those working in God's way (Fī Sabīlillāh)
  8. Children of the street / Travellers (Ibnus-Sabīl)

According to the Hadith, the family of the Muhammad should not consume any Zakat. Zakat also should not be given to one's own parents, grandparents, children, grandchildren, or spouses. It is also forbidden to disburse zakat funds into investments instead of being directly given to those who are in need.[21]

Some scholars disagree whether the poor that qualify should include non-Muslims. Some state that Zakat may be paid to non-Muslims, but only after the needs of Muslims have been met.[21]

Fi Sabillillah is the most prominent asnaf in Southeast Asian Muslim societies, where it broadly construed to include funding missionary work, Quranic schools and anything else that serves the community (ummah) in-general.[22]

Additionally, the zakat funds may be spent on the administration of a centralized zakat collection system.[11]

Role in society

The zakat is considered by Muslims to be an act of piety through which one expresses concern for the well-being of fellow Muslims,[23] as well as preserving social harmony between the wealthy and the poor.[24] Zakat promotes a more equitable redistribution of wealth, and fosters a sense of solidarity amongst members of the Ummah.[25]

Zakat is meant to discourage the hoarding of capital and stimulate investment. Because the individual must pay zakat on the net wealth, wealthy Muslims are compelled to invest in profitable ventures, or otherwise see their wealth slowly erode. Furthermore, means of production, such as equipment, factories, or tools, are exempt from zakat, which further provides the incentive to invest wealth in productive businesses.[26]

See also

Notes

  1. ^ Benda-Beckmann, Franz von (2007). Social security between past and future: Ambonese networks of care and support. LIT Verlag, Münster. p. 167. ISBN 978-3-8258-0718-4.
  2. ^ a b Heck, Paul L. "Taxation." Encyclopaedia of the Qur'an
  3. ^ a b c d A. Zysow, "Zakāt." Encyclopaedia of Islam, Second Edition.
  4. ^ a b c d e Weiss, Anita M. (1986). Islamic reassertion in Pakistan: the application of Islamic laws in a modern state. Syracuse University Press. p. 81. ISBN 978-0-8156-2375-5.
  5. ^ Hawting, Gerald R., ed. (2006). The development of Islamic ritual. Ashgate Publishing. p. 301. ISBN 978-0-86078-712-9.
  6. ^ Hashmi, Sohail H. (2010). "The Problem of Poverty in Islamic Ethics". Poverty and Morality: Religious and Secular Perspectives. Cambridge University Press. p. 202. ISBN 978-0-521-12734-9. {{cite book}}: Unknown parameter |editors= ignored (|editor= suggested) (help)
  7. ^ Tamimi, Azzam (2001). Rachid Ghannouchi: a democrat within Islamism. Oxford University Press. p. 140. ISBN 978-0-19-514000-2.
  8. ^ Bogle, Emory C. (1998). Islam: origin and belief. University of Texas Press. p. 31. ISBN 978-0-292-70862-4.
  9. ^ Khatab, Sayed (2006). The power of sovereignty: the political and ideological philosophy of Sayyid Qutb. Taylor & Francis. p. 62. ISBN 978-0-415-37250-3.
  10. ^ Zaman, M. Raquibuz (2001). "Islamic Perspectives on Territorial Boundaries and Autonomy". Boundaries and justice: diverse ethical perspectives. Princeton University Press. p. 189. ISBN 978-0-691-08800-6. {{cite book}}: Unknown parameter |editors= ignored (|editor= suggested) (help)
  11. ^ a b c Medani Ahmed and Sebastian Gianci, Zakat, Encyclopedia of Taxation and Tax Policy, p. 479
  12. ^ Kuran, Timur (1996). "The Economic Impact of Islamic Fundamentalism". Fundamentalisms and the state: remaking polities, economies, and militance. University of Chicago Press. p. 318. ISBN 978-0-226-50884-9. {{cite book}}: Unknown parameter |editors= ignored (|editor= suggested) (help)
  13. ^ Kuran, Timur (2010). Islam and Mammon: The Economic Predicaments of Islamism. Princeton University Press. p. 19. ISBN 978-1-4008-3735-9.
  14. ^ Momen, Moojan (1987). An Introduction to Shi`i Islam: The History and Doctrines of Twelver Shi`ism. Yale University Press. p. 179. ISBN 978-0-300-03531-5.
  15. ^ a b Marty, Martin E. & Appleby, R. Scott (1996). Fundamentalisms and the state: remaking polities, economies, and militance. University of Chicago Press. p. 320. ISBN 978-0-226-50884-9.{{cite book}}: CS1 maint: multiple names: authors list (link)
  16. ^ Clark, Janine A. (2004). Islam, charity, and activism: middle-class networks and social welfare in Egypt, Jordan, and Yemen. Indiana University Press. p. 153. ISBN 978-0-253-34306-2.
  17. ^ Tripp, Charles (2006). Islam and the moral economy: the challenge of capitalism. Cambridge University Press. p. 125. ISBN 978-0-521-86377-3.
  18. ^ Kogelmann, Franz (2002). "Sidi Fredj: A Case Study of a Religious Endowment in Morocco under the French Protectorate". In Weiss, Holger (ed.). Social welfare in Muslim societies in Africa. Nordic Africa Institute. p. 68. ISBN 978-91-7106-481-3.
  19. ^ Ariff, Mohamed (1991). The Islamic voluntary sector in Southeast Asia: Islam and the economic development of Southeast Asia. Institute of Southeast Asian Studies. p. 38. ISBN 981-3016-07-8.
  20. ^ De Waal, Alexander (2004). Islamism and its enemies in the Horn of Africa. Indiana University Press. pp. 148–149. ISBN 978-0-253-34403-8.
  21. ^ a b Islamic finance: principles and practice. Edward Elgar Publishing. 2009. p. 29. ISBN 978-1-84542-525-8. {{cite book}}: Unknown parameter |authors= ignored (help)
  22. ^ Ariff, Mohamed (1991). The Islamic voluntary sector in Southeast Asia: Islam and the economic development of Southeast Asia. Institute of Southeast Asian Studies. p. 39. ISBN 981-3016-07-8.
  23. ^ Weiss, Anita M. (1986). Islamic reassertion in Pakistan: the application of Islamic laws in a modern state. Syracuse University Press. p. 80. ISBN 978-0-8156-2375-5.
  24. ^ Scott, James C. (1985). Weapons of the weak: everyday forms of peasant resistance. Yale University Press. p. 171. ISBN 978-0-300-03641-1.
  25. ^ Jawad, Rana (2009). Social welfare and religion in the Middle East: a Lebanese perspective. The Policy Press. p. 60. ISBN 978-1-86134-953-8.
  26. ^ Abdallah al-Shiekh, Devin J. Stewart, "Zakāt", The Oxford Encyclopedia of the Islamic World.

References

Further reading

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