Friday 6 June 2014

Zakat is better than taxes


Friday, June 06, 2014 - An Islamic state cannot impose any taxes upon its Muslim citizens, besides Zakat. As far as the non-Muslims living in an Islamic state are concerned, they become citizens of an Islamic state through an agreement between themselves and the Islamic state. Taxes upon these non-Muslims shall be governed by that agreement, which was mutually agreed upon. In view of the explanation, imposition of Income tax, Wealth tax and all other direct or indirect taxes, by an Islamic state upon its Muslim citizens, is not in accordance with the directives of the Islamic Shari‘ah.

The history of Zakat is the same as that of Salaah. It is evident from the Qur’an that like Salaah its directive always existed in the Shari’ah of the previous Prophets. When the Almighty asked the Muslims to pay it, it was not something unknown to them. All the followers of the religion of Ibraham (AS) were fully aware of it. For this very reason Surah Al-Ma’arij (70:25) describes it as “A specified right.” Thus it was a pre-existing Sunnah which the Prophet (peace be upon him), with necessary reformations, upheld at behest of the Almighty.

There is a clear difference between Zakat and Taxation. Zakat is the only tax an Islamic government can impose upon its Muslim citizens. It is not merely a charity fund but can be spent on the collective needs of the people as well: The zakat money can be used to pay the salaries of all government officials including that of the head of state, to build all works of public interest, to cater for defence requirements and to establish an Islamic system of Insurance. In short, the system of zakat envisaged by the Qur’ân and Sunnah totally meets the requirements of running a welfare state.

The right of a state to levy taxes on its public, in particular, has created an unending rift between the rulers and the ruled. An institution which apparently began as a voluntary contribution by the people to relieve a few individuals of their financial responsibilities and entrust them with the development and progress of their collectivity gradually became the most effective means of their own exploitation and persecution. 

In my opinion, 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 two modes: (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.

As we have seen one of the major objectives of Zakat is poverty alleviation. The issue is can Zakat be spent on Non-Muslims for this purpose. Though a number of Jurists have viewed that Zakat can be spent on non-Muslims, the majority view is that for poverty alleviation of Non-Muslims non-Zakat resources should be spent. There is no disagreement on the point that poverty alleviation and welfare of non-Muslims is an important concern for an Islamic state. In my view Zakat receipt would be sufficient in most of the countries which have attained mid-level development in making provision for the poor and the unemployed. It may not be sufficient in some countries where there is massive poverty. These countries need other resources to tackle the problem of poverty.

Zakat and tax are not same. Zakat is very small part of yearly income while tax is a huge share of monthly income one earns. Zakat is the due share of total amount to be paid once within one Islamic year. While tax is what is counted in total in one fiscal year but it is paid on every commodity as well as paid as taxes specified by govt. in every legal and authorized act or buying or selling. Zakat eradicates poverty while tax increases in many folds. Hence, people pay taxes happily but they avoid paying zakat which is lesser than taxes and better in use than the taxes.



(Pakistan Observer / 06 June 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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