A Model Zakat System

 

A Model Zakat System

Aslam Fareed

 

ZAKAH (pronounced as Zakat in Urdu) is an Arabic word and its literal meaning is to make clean and purified. The Qur'an lends a special meaning to this word. Mohammad Asad in his explanatory translation The Message of The Qur'an¹, defines the word Zakat as an "obligatory tax, incumbent on Muslims, which is meant to purify a person's capital and income from the taint of selfishness (hence the name). "'

 

The proceeds of this tax are meant to be spent mainly, but not exclusively, on the poor. Therefore, technically it refers to compulsory deductions from outputs and savings in excess of certain exemption limits at the close of a lunar year. Unlike the charity or alms giving of which "is a voluntary act, payment of Zakat is mandatory and its rate of deductions and heads of expenditures are well defined.

 

There are haves and have-nots in a human society. Some people are not well equipped to compete, others are physically unable to work or mentally unable to hold a job, and then some are economically broken either due to their own faults or due to the faults of others. Whatever may be the cause a sizable section of society finds it difficult to get along economically. Society must decide to do something about it.

 

Many societies allocate a part of the income raised from their financially well off sections to support the poor and deprived segments of society. They tax the rich and spend this money on the poor. For example, in the United States nearly 13% of total personal income in the year 2000 came from transfer payments (Bureau of Economic Analysis, Washington DC). A transfer payment is a payment to a person for which that person has not rendered any service. A large section of transfer payments are made to very poor because either they are unemployed or their income is very low.

 

In the Muslim society, from the very beginning, believers were motivated and encouraged to allocate a part of their earnings for the uplift of poor. Some very early revelations (Al Qur'an 51:19 and 71:24 & 25) in Makkah motivate believers to assign a due share (Haqqul Maloom) of the needy and deprived in their possessions. In Madina, when a Muslim society had finally emerged, wealthy sections of this society were made responsible for improving the living conditions of the poor and deprived people. Share of the poor and deprived segments in the wealth of well-off Muslims was specified in the form of Zakat rates and Zakat payments were made compulsory for every rich Muslim. Laws for collection of Zakat were enacted and heads of expenditure were specified.

Notwithstanding its spiritual significance, for all practical purposes Zakat is a tax and is meant to transfer payments from the rich to-the poor and deprived sections of the society. Like all other taxes, for its proper collection it requires a system.

There is a consensus among all leading Muslim scholars that the heads of