Zakat and tax

Compulsory by shari'ah Islamic law Government levy.

Zakat and tax

Alms are for the poor and the needy, and those employed to administer the funds ; for those whose hearts have been recently reconciled to Truth ; for those in bondage and in debt; in the cause of Allah; and for the wayfarer: They are those people who do not own in excess of their personal needs any type of wealth that is equal to the value of nisab The difference is a technical difference, but the principle is that neither of them possess in excess of their personal needs any type of wealth that is equal to the value of nisab.

This refers to those individuals commissioned by the head of the Islamic government to collect Zakat. This was an avenue to dispense your Zakat in during the early days of Islam. The Zakat money would be given to three types of people: Those disbelievers from whom it was perceived that by giving this donation, they would embrace Islam.

To the leaders of the disbelievers in order to save the believers from their evil. To those who have just accepted Islam.

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This payment would be made to elevate their spirits. According to the Hanafi scholars, this avenue is now abrogated. Sharh Fath al-Qadir, 2: Zakat money can be used to purchase a slave from his master in order to set him free.

Again, this is inapplicable. This is regarding a person who despite having assets at his disposal, he is overwhelmed with debt and the debt exceeds the value of his assets.

Zakat and tax

Those in the cause of Allah fi sabil Allah: According to the majority of scholars, this refers to and is restricted to only those people who are engaged in Jihad military struggle. This refers to those travellers who are in a desperate situation and have no access to their personal money. Money nowadays can be wired across the globe in a matter of minutes, hence, one who has the ability to receive his money, will not be allowed to take Zakat or Sadaqat al-Fitr.

It is estimated that Muslims annually donate zakat sums amounting to tens or even hundreds of billions in US dollars for needy causes.

This is widely interpreted in Islamic jurisprudence, but invariably includes jihad. In the classic manual of Shafi'i fiqh it is for "those fighting for Allah, meaning people engaged in Islamic military operations for whom no salary has been allotted in the army roster but who are volunteers for jihad without remuneration.

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In Islamic terms, zakat is both a tax and a charity, and no problem is seen with discussing it as both, along with actual voluntary Islamic charity i.

But by its commonly-accepted definition, it is strictly a tax. When considering compulsory taxation in most non-Islamic nations, it is charged on certain goods and is taken by the state from individual yearly earnings and then in part distributed to those within the state who are unemployed, or other public services, such as the state's military services.

In essence, this tax functions similarly to zakat, with the state distributing portions of the tax revenue for welfare purposes in accordance with the benevolent values of the society. Like taxes, zakat is a fard obligatory requirement from Muslims, amounting to about 2.

The compulsory payment was collected and distributed by the state under the Prophet Muhammadthe Rightly-Guided Caliphsthe later Caliphate, and is even collected and distributed by the state in some theocracies today for example, Saudi Arabia.

Thus a full implementation of zakat via a state apparatus makes it, in all but name, a tax. In countries where zakat is not enforced and administered by the state, an individual Muslim decides which specific causes to support, and such activity can more clearly be described as obligatory charitable giving.

Zakat - Wikipedia

This is not to doubt the great generosity of spirit and charitable intentions of individual Muslims giving zakat even in countries that enforce it.

Further, as mentioned above, besides Zakat, Muslims also give Sadaqahwhich is voluntary charity that can be given to anyone in need, and is mentioned 13 times in the Qur'an such as in the following verse: They ask thee what they should spend In charity.

Whatever ye spend that is good, is for parents and kindred and orphans and those in want and for wayfarers. And whatever ye do that is good, -Allah knoweth it well.Zakat (Arabic: زكاة ‎ zakāh, "that which purifies", also Zakat al-mal [zaˈkaːt alˈmaːl] زكاة المال, "zakat on wealth", or Zakah) is a form of alms-giving treated in Islam as a religious obligation or tax, which, by Quranic ranking, is next after prayer in importance.

Technical Comparison between Business Zakat and Tax on Business Income in Malaysia 15 However, tax as defined in the Oxford Dictionary is a .

Tax is a social obligation without having special sense of gratitude to Allah or to obtain nearness to Allah while Zakat is essentially a matter between Allah and His servants, but tax has been primarily a matter between citizens and the state authorities.

Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is applied in more than countries around the world as a reliable source of revenue for state budgets.

VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service. KPMG, SAUDI TAX AND ZAKAT - 1 Saudi Tax and Zakat / Taxation and the concept of Zakat The past year has seen significant developments in the area of tax.

General Authority of Zakat and Tax (GAZT) looks forward to being one of the best tax ‎departments around the world and achieving the desired successes in the National ‎Transformation Program “NTP”, which aims to achieve financial balance between revenues and ‎expenditures in

Zakat and Taxes