IN THE NAME OF ALLAH, THE BENEFICENT, THE
MERCIFUL
ZAKAH – GUARANTEED SOLUTION OF THE
“HAVE-NOTS”
[Shamim A Siddiqi,
INTRODUCTION: Zakah is
one of the fundamental Ebadah in Islam. Equally, it is one of the most
important “peaceful” and systematic means of transferring of funds and
resources from high ups to lower downs. It makes the flow of wealth from “haves”
to “have-nots” so willingly and cooperatively that there is no wrinkle on the
face of the person who pays rather, he expresses thanks to Allah (SWT} that
enables him or her to fulfill his or her obligation towards the society,
especially in meeting the basic and fundamental needs of those who are poor,
needy, underemployed, unemployed or incapacitated. The person who, under the
prescribed criteria [Nisab] of Zakah, after paying it feels contented that the
receiver has relieved him or her from one of his/her greatest social
responsibilities towards the community or the Ummah. On the other hand one who
receives Zakah either through state or through individuals does not feel any
obligation to person who fulfills it as his Ebadah [worship] and he receives it
as his or her right that Allah places in the wealth of haves for the “have-nots.”
It does not violate the feelings of self-respect of the receiver or creates any
sense of arrogance or high headedness in one who pays it. Both sides are at par
highly dignified and thankful to Allah alone.
It is, therefore, essential that I
must first spell out the meanings of Zakah and then elaborate its concept, its
philosophy, collection and its method, distribution and utilization and its
economic effects both on individuals and society in the overall spectrum of
Islam as way of life. The topic is vast and I will, therefore, discuss the
following aspects of Zakah in detail:
1. Meanings and concept;
2.
Method of Collection and Distribution;
3.
Its economic effects.
It will explain to the person who
pays the Zakah as why he is paying and one who receives it must know as why he
is receiving it without any obligation to anyone. It would equally explain the
significance of Zakah in the present context of the world that how beautifully
and effectively Islam establishes its own welfare
system for its people without throwing any burden on the exchequer of the state
in any way. In an orderly fashion, it removes the disbalances in the economic
strata of the society with the willing cooperation of its own people.
MEANINGS
OF ZAKAH: Literary meanings of Zakah are
“increase” or “augmentation” or “growth”. It also means “purification” [Lexicon
– E. W. Lane Part III page 1240] Zakah is not a tax on income at all but a levy
on the savings. However, it must be noted that all the means of production and
things that are in personal use, including house, is exempted from Zakah. In
the Islamic Shariah [code of conduct], Zakah is a system or process through
which a fixed amount of 2½ % is charged on the total
accumulated wealth of an individual who possesses it if it equals to or
exceeds 7½ tola [about 3½ ounces] of gold or 52 ½ tola of silver and that it
remains with him or her for a period of a year. It is paid as an obligatory
Ebadah. He/she thus purifies his or her mal [wealth] and Allah gives Barakah
[blessing] in it. It flourishes his wealth and all become Khair [good] for the
person and the community. This fixation of the criteria [Nisab] is a barometer
that tells who is to pay Zakah and who will accept Zakah if his or her savings
do not touch the level of the fixed Nisab.
The human life can be compared to a triangle
with three cones. One cone represents
the Creator and Sustainer and the other cone the people. Now the individual who
is at the third cone has to cement his relations with Allah, the Creator and
sustainer, by offering Salah [prayer] and on the other he is to cement his or
her relations with the people by willingly sharing his or her wealth regularly
by imparting a fixed percentage point every year towards the welfare of his/her
fellow citizens. It helps in maintaining equilibrium in his personal life and
the society in which he lives. He/she keeps his Allah pleased constantly by
praying at least five times in a day and keeps his community solvent by being
mindful of the people’s needs and urgencies. That is why in the Qur’an, Allah
has given equal emphasis on both these formats of Ebadah: Salah and Zakah.
Every where in the Qur’an, both go together: “establish prayers and pay Zakah”.
This is the least that is expected from a Muslim. That is the reason Allah
(SWT) declares in the Qur’an about the idolaters: “If they repent and establish
Salah and pay the Zakah, then leave their way free. Lo! Allah is Forgiving,
Merciful” [Al-Tawba. 9: 5]
THE
CONCEPT OF ZAKAH: Allah (SWT) hasn’t created everyone in this world at par
with equal amount of talents, capacities and resources. Men or women earn their
livings by exercising these God-gifted resources and talents. The more one is
talented and have better physical and mental faculties, he is expected to make
more in this world and one who is deprived of these means or suffers in any
capacity naturally gets less from the bounties of nature scattered all around.
Everyone thus gets as per his capacities. It is, therefore, natural that in the
fitness of the matter who gets more must share it with one who gets less or
cannot make any thing at all. The Qur’an confirms it:
“Is it they who apportion their
Lord’s mercy? We have apportioned among them their livelihood in the life of
the world, and raise some of them above others in rank that some of them may
take labor from others; and the mercy of Allah is better than (the wealth) that
they amass.”
[The Qur’an. 43: 32]
“He it is who has placed you as
viceroys of the earth and has exalted some of you in rank above others, that He
may try you by (the test of) that which He has given you.”
[The Qur’an. 6: 165]
“And covet not the thing in which
Allah has made some of you excel others. Unto men a fortune from that which
they have earned, and unto women a fortune from that which they have earned.
[Envy not one another] but ask Allah His bounty. Allah is ever Knower of all
things. [The
Qur’an.
“Lo! Thy Lord enlarges the provision
for whom He will, and straitens (for whom He will). Lo, He was ever Knower,
Seer of His slaves.” [The Qur’an.
In view of this scenario of
differences in capacities and resources in different people, Allah (SWT) has
categorically declared: “And in their wealth the poor and the deprived has due
share,” [The Qur’an. 51: 91] and in Surah Al-Ma’arij, it says: “And in whose
wealth there is a right acknowledged for the beggar and the destitute.”
[The Qur’an. 80: 24 -25]
The directives of Rasulullah (S) are
distinctly clear when he (S) ordained: “Take (Zakah or Sadaqah) from their
wealthy and return it to their poor and destitute” Thus the deprived people of
the society have a right in the wealth of “haves” as ordained by Allah and His
Prophet Muhammad (S) and it is the obligation of the Islamic society and sate
to collect it from the rich and transfer it systematically to the poor and
needy, the “have-nots”. How? It needs an elaborate discussion as follows:
COLLECTION:
Considering the nature of Zakah that it is collectable only from those Muslim
brothers and sisters who have attained the minimum standard of Nisab and the
sanctity of Ebadah that it signifies, it is essential that an autonomous body
is created to manage both its collection and distribution in the manner it has
been spelled out in Shariah. The Institution of Zakah must be managed by highly
trusted men of character and integrity so that it is collected through rightful
process and distributed or expended in the manner it is ordained by Allah in
Verse 60 of Surah Al-Tawba and as practiced by Rasulullah (S) in his lifetime.
To execute both the functions
effectively, the country should be divided in different Zones, districts,
towns, boroughs and villages from administrative point of view of Zakah and its
implementation. It should be followed by house to
house and family to family survey for: 1.
listing number of members of each family [adults and minors with their
respective ages]; 2. address and identity; 3. monthly/yearly income and source
of earnings; 4. list of assets and liabilities – cash and bank balances, ornaments, shares, liquid and fixed assets
and liabilities, stock in trade if he/she is a business man or woman; 5. health
condition of family members; 6. yearly/monthly needs and requirements of the
family; 7. amount of deficit, if any; 8. total value of assets minus
liabilities; 9. Zakah due or entitlement to receive; 10. Remarks of the
surveyor/compiler/administrator
The criterion of Zakah fixed by
Shariah [Islamic code of conduct] connotes that each and every member of the
society either will pay Zakah if he reaches or surpasses the limit or will
receive if he or she is below that standard. In the time of Caliph Omar ® a
register was maintained with all the necessary information for all the
receivers at each place especially in the capital Madinah. In today’s society,
it would be much easier to maintain and keep this information updated through
computer internet system. Survey will be carried out regularly at frequent
intervals to meet the changing needs and urgencies of the situation in each and
every individual case. Today a person or a family is receiving Zakah, tomorrow
its condition improves and it will automatically start paying Zakah. Similarly,
a person or a family that was paying Zakah may fall in trouble and becomes
entitled to receive Zakah will automatically be helped out of this fund. This
adjustment of individual status will, thus, be maintained in a continuous
process in either of the two situation, doing justice to each and every case.
The system
will fundamentally scatter the basic human needs - food, clothing, medical
help, shelter, education and free justice to each and every deprived individuals
of the society through the paramount welfare system of Islam that does not
allow any of its member to suffer for want of means but gets the equal
opportunity to stand and struggle for the betterment of his and his family life
and becomes a source of strength for the community in due course.
Unfortunately, there is no Islamic
state at this critical juncture of human society. The adversaries of Islam are
opposing its emergence anywhere in this world with tooth and nail simply out of
ignorance and centuries-old animosity and prejudices. Thus, they are preventing
implementation of the system of Zakah and showing to the world its economic blessings
that what the “mightiest power” on earth could not maintain its much
popularized welfare system and gradually making it wither away, the welfare
system of Islam could do it in more accomplished manner and on a permanent
basis. What a boon it would be for the human society. Can the stalwarts of the liberal societies accept this
challenge and let the Islamic system emerge somewhere on this earth to prove
its worth? Unfortunately, currently, they all are behaving like “dogs in the
manger.”
In the absence of an Islamic state,
the Muslim communities around the world should resort to introduce and
implement the system of Zakah for its people on the pattern discussed above.
The Muslim community living in
In American perspective or anywhere
in the world it would be on voluntary basis. Only the Muslim leadership has to
prove its worth and show the requisite amount of courage, integrity of
character and trustworthiness to its members and convince them that they will
use the Zakah funds only for the purpose they are assigned by Allah and in the
manner it was disposed off by His Prophet (S). If they are able to build the
confidence in their people, they can transform the Muslim society of
A Format: To
facilitate the computation of payable Zakah, I suggest the following format for
individuals who want to work it out in the absence of any collective
institution.
Computation
of Zakah Return Format
Name………………………………Address………………………………………………
……………………………………………………………………………………………..
Phone……………………………..
Area/Zone…………………………………………….
Details of Cash and fixed
assets:
Value in Dollars
1. Cash in hand and bank as at
………………………………………..
2.
Shares at market value……………………………………………...
3. Goods in stock & in
trade, both raw & finished……………………
4.
In case of factory: Total value including goods in trade &
Goodwill value LESS - Book value of
land/building, machinery
furniture, transport and office
equipment………………………….
5.
Market value of bonds and securities or any investment………….
6.
Ornaments – gold, silver & bullion………………………………..
7.
Any other asset –fixed or otherwise not mentioned above……….
Total Value of assets [cash & fixed]…………………………………
Less liabilities – loans
payables………………………..…
Net value of Assets for
calculating Zakah..................................
Zakah Payable @ 2 ½ % ……………………..
Important
Notes: Zakah is not payable:
1. On diamonds and precious
stones
2.
On gold less than 7 ½ tola and Silver less than 52 ½ tola
3.
Living home, utensils and articles of personal use
4.
Means of production and earnings
Signature……………………………
Date…………..
This
format is only for the assessment of Zakah at individual level. For
manufacturing units, banks and financial institutions, mines and fisheries,
hotels and hospitals, air and land transport businesses, food and agricultural
industries, military contractors and house building industry, departmental
stores, etc. that are the backbone of modern trade, industry and commerce and
can yield hundreds of billions of Zakah every year need special survey/study.
But the pattern of collection and distribution will be the same as discussed
above. Muslim Ummah should take initiative in this respect and develop a
mechanism to foretell the amount of Zakah that can be raised/collected at state
level and show to the capital-hungry nations of the world the miracle what the
institution of Zakah can display in getting the economy of the “have-nots”
resolved in less than a decade or so at ease and without any
“oppression/exploitation” of capitalism or “nationalization” of socialistic
system. I will discuss the miracles of Zakah and its enormous bounties that an
Islamic society will taste when elaborating the economic effects of the system at
some later stage.
DISTRIBUTION:
Allah
(SWT) has Himself spelled out the heads under which Zakah is to be expended in
Verse 60 of Surah Al-Tawba. “The Sadaqah [Zakah] is for: 1. the Poor; 2. the
needy; 3. and those who collect [or organize] the Zakah; 4. those whose hearts
are to be reconciled; 5. freeing the captives;
6. and for the debtors; 7. and in the cause of Allah; 8. and the wayfarers – an obligation imposed
by Allah. Allah is Knower, Wise.”
The above quoted verse is very
significant. It pin pointedly categorizes the dire needs of the society where
these funds are to be expended. Zakah cannot be used on any other head other
than that Allah has fixed. Every head needs attention, especially “the cause of
Allah” when the Deen of Allah no where dominates and struggle for its
establishment is going on at different places in different names and
nomenclature.
IMPLEMENTATION:
1. A minimum
standard of living is to be worked out on the basis of prevailing market prices
for an individual, a couple and a family of two, three and four children,
subject to revision/adjustment on six monthly or yearly basis.
2. With the help of the above
standard, the amount of help from Zakah fund will be fixed for each family
which may differ from family to family, depending on the basic needs and its
available income, if any.
3.
Through the help of the standard Zakah Return Format -ZTF, the giver of
Zakah will file his or her own return with the autonomous Zakah Collection Body
-ZCB [as discussed earlier] with the amount due from him/her, subject to
verification subsequently by Zakah Inspectors to be appointed by the aforesaid
authority. It would minimize the paper work at both the ends. But in the
absence of any collection authority as the situation exists today throughout
the Muslim world and in America, the payment of Zakah on the community level
will be on voluntary basis, and its correctness will depend on the individual’s
Allah consciousness and the strains that the community will take in educating
its people in understanding the importance of Zakah in depth.
4. The aforesaid survey and the
application of the minimum standard of living will tell the total amount of
Zakah funds that will be available. Equally, it would establish the total
number of families who fall under the category of “Zakah receivers” and the
amount of Zakah funds that will be required by the community for payment in
terms of cash for the immediate needs of these families. It will also tell that
after meeting the immediate needs how much is left over for the permanent
rehabilitation of the poor and needy at local, regional and national
levels.
5.
Zakah funds can be expended in three ways:
i. to meet
the immediate needs of the poor and needy in cash on the lines spelled out
above;
ii. to use it for permanent economic
rehabilitation of this group both on individual and collective levels like
providing accommodation to homeless people, kitchen-soup facilities, building
cottage industries, arranging small shop or businesses for one or a group of
persons with equal share;
iii. To undertake mass utility programs like:
building low income-unit houses, hospitals, medical aids, halfway houses for
inmates, medical pharmacies or aid clinics, educational institutions for
imparting basic education, providing
technical know-how and opening community
centers etc..
6.
Priority of expenditure is to be fixed on the basis of the above
categories. Initially, most or the bulk of the Zakah funds may be required to
meet the immediate needs of the poor and needy. That may not leave much for
item #ii, and #iii above. Alternatively, the
entire proceed of Zakah may be divided into two halves [and it would be more
prudent to do that]: one half for the immediate needs of the have-nots and the
other half to be earmarked to resolve their economy on permanent basis in order
to make the country/society solvent as a whole. It would go a long way in
removing the poverty and sense of deprivation from the poor and the needy
altogether within a period of five to seven years at the most. With the
emergence of that era, there may not be anyone left to “accept” the Zakah and
most of the funds will be available for only one head, “in the cause of Allah.”
7.
Zakah funds will be expended as a rule at the place from where it is
collected. Only surplus, if any, will be transferred to center or other places
to meet the local shortage.
8.
Under special circumstances, Zakah funds can be expended on only one
head. Rasulullah (S) used to give a lot of Zakah funds for item # 7 “on those
whose hearts are to be reconciled” or to poor and needy to make them solvent
outright. It is on the discretion of the Head of the Islamic sate or the Shurah
to disburse the Zakah funds as the situations warrants but within the limits of
Verse 60 of Al-Tawba.
It is now desirable to discuss the
enormous economic effects of Zakah on the socio-economic-political structure of
a society that adopts and implements this system as the integral part of Islam
as a way of life.
OUR
ECONOMIC MALAISE: In the consumer based economy, it is essential that there
is a constant flow of cash to different sectors of the population in shape of
wages, profit, tax cuts or aid programs. The more there is a higher velocity in
money circulation, the greater will be the volume of economic activities.
Reducing or cutting down the rate of interest is one of the effective means of
pumping more money in the market for investment, economic activities, thereby producing
more employment and wages. It automatically creates demand in the market for
goods and services when the purchasing power of the common man increases. The
supply side economist that is why recommend resorting to expending on
development, social services and building infra-structure in peace time to
boost employment and increase the number of wage earners and thereby taxes.
These all are the artificial means to boost the economy, employment and wages,
leading to prosperity of the people as a whole.
But, unfortunately, this process is
not smooth. Its passage is bumping. It is frequently visited by inflation,
depression and sluggish economy, leading towards unemployment, labor unrest,
contraction in economy, confronting with fiscal crisis often and on. It is
enveloped with a vicious circle of economic rise and fall. It happens because
there is no hard and fast economic rule that is universal except one: increase
the demand, the supply will increase followed by employment, additional income
to the people and revenue to the state. Everyone follows it meticulously.
The economic activities under the
capitalistic system depend on the whims of the entrepreneurs, the lenders, and
the capitalistic class that hold money and control its inflow and outflow. This
“selfish” class invests in the market only when there is a chance of making
profit increases the flow of cash in the market thereby increasing economic
activities, employment and a bit of prosperity at the common strata. But on the
slightest hint of slackness in business, fall in demand, lower return of
profit, it starts the process of
contracting money supply in the market, creating shut downs and lock-outs in
industries, unemployment, loss of wages resulting in labor crises and budget
deficits etc.. This trade cycle is the product of unrestricted capitalism.
Humanity is constantly experiencing this “boom and bust” in the economy for
centuries together. The stalwarts of the system have no cure for this ailment.
It is the inherent weakness of the system. As such, the system could never reach its
ideal, the “optimum” point where all the factors of production are constant
along with the growth in economy.
The system of Zakah takes care of all
the ailments that are inherent in the capitalistic economy and offers much more
benedictions of its own. Let us examine its blessings in the human society that
adopts it as an integral part of Islam as a system of life, a code of conduct,
the Divine guidance for the benefit of mankind to live in peace and harmony as
equals with no sense of superiority of “haves” over the “have-nots.”
THE
ECONOMIC EFFECTS OF ZAKAH:
1. It increases the velocity of money: In 1964 when I was in
The point that I want to emphasis is
that the system of Zakah is feasible and can do away with the economic problems
of the “have-nots”, irrespective of the fact whether the country is poor like
2.
Constant Flow of wealth: Through paying Zakah every year on the accumulated wealth
of the individuals, industries, trades, businesses, corporations,
semi-government agencies, the flow of wealth from “haves” to “have-nots” or
from the affluent to the deprived will be constant, catering the immediate
needs of the poor and needy and rehabilitating their economy on permanent basis
on the lines suggested earlier. Within a decade at the most, there will be no
body in the country to accept Zakah. As it is expected, most of the deprived
class may become solvent and might come in the position to pay Zakah by
themselves. And when there will be none to accept Zakah in the country except a
very small minority that is incapacitated, wayfarers and “the cause of Allah” ,
the proceed of Zakah will be available to meet the needs of the have-nots and
down trodden of other underdeveloped countries of the world. What a blessing it would be for the world to rejoice the
blessing of Zakah! What the total efforts of the World Bank, the IMF and the
“super economies” of the world could not do within the last fifty years, the
Institution of Zakah with all certainties will attain, Insha Allah [God
willing], within a decade, provided there is a will in the Muslim countries to
give a chance to establish the Islamic system of life and the so-called “progressive”
and “liberal” societies have the courage and stomach to bear it with patience.
Will both the Muslim and the non-Muslim worlds accept this challenge?
In the time of Caliph Omar bin Abdul
Aziz, within the two and half years of his rule, the society was so prosperous
that there was practically no body to accept the Zakah. The blessings of Zakah
do not end here. Its far reaching effects go beyond our imagination.
3. Manifold Increase in demand of good and
service: The flow of wealth to have-nots will increase the purchasing power of the
poor and needy. They will naturally spend the Zakah money on their immediate
needs like food, cloth, shelter, health and other house hold necessities,
thereby increasing the demand of these goods and services manifold. Since this
demand will be constant with the constant flow of Zakah good number of
industries will be established to cater these demands, increasing more
employment, wages and yielding more taxes for state revenue. It will automatically
increase the standard of living of the masses and their prosperity with total
employment. This circle of demand and supply will go on multiplying the
economic activities in geometrical proportions every year till the economy
reaches the “Optimum” point within the stipulated period of a decade, a “point”
that is beyond the reach of capitalism.
Equally, the
sector of permanent rehabilitation of the poor and needy will help in
establishing medium and cottage industries. The undertaking of mass utility
programs will augment the demand of capital goods thereby boosting production
and creating employment in that sector of the economy. It will be the
additional boon to the economy.
Other benefits of the system of Zakah
can be summarized briefly as follows?
* It will increase the bargaining
power of the worker as he will have something to fall back in case of
unemployment.
* Dependence on foreign loan in
underdeveloped countries will gradually diminish or may be limited for sometime
to the extent of technical know-how only.
* The constant presence of the forces
of demand and supply in the market will keep the “inflation” away and the
frequent visit of “recession”, “depression” or “sluggish” economy will become
the things of the past.
* Government will be able to divert
its resources form rendering “welfare services” to some greater needs of the
society like defense. [Ref. to Verse 60 of Surah Al-Anfal]
* It
will ultimately enable the Muslim world to render greater and greater help in
rehabilitating the world economy by offering its “surpluses” to “have-nots” of
the world, especially of the underdeveloped countries of Asia, Africa and Latin
America, augmenting into a new era of “help and cooperation” and not of “loan
and exploitation” as prevails today
CONCLUSION:
I
have so far discussed Zakah – its meanings, concept, collection, distribution and
the “economic effects” on the lines it is understood today or was comprehended
in the past since the time of Prophet Muhammad (S) to our time. Now the world
situation has changed. It is much more complicated with tremendous economic and
political trends, currents and cross currents, global issues and challenges
that are constantly disturbing the peace and tranquility of human abode.
Enormous means of production and earnings have been added in the economic
dictionary of the age along with the ever-growing dilapidated condition of the
poor that is, unfortunately, becoming poorer and poorer day by day.
Equally, a lot of new Zakatable items
that were not in existence when the system was introduced have now been added
to the list. The needs and
responsibilities of a modern state are becoming boundless the way the dictum of
President Bush of “preemptive” attack has become “stateless”. National
boundaries, jurisdiction and the concept of “sovereignty” are becoming
“fragile” and “meaningless.” In such a “melting-pot”, the system of Zakah, its
scope, implementation and diversity of purpose in the present context of the
world has attained new dimensions and that must be addressed in detail. At the
same time, the “need” of the modern man and that of the emerging global society
are generating multi-dimensional problems. This is a surmounting challenge that
the system of Zakah faces today and it has to resolve it to prove its
benefitiality to the human society. I will do it, Insha Allah, soon.
Shamim A Siddiqi
October 27, 2003