The Third Pillar of Islam: Zakat, the Distribution of Wealth

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Azhar Goraya, Mexico

At their heart, all economic systems seek to allocate and distribute resources amongst a populous in the most just manner possible, balancing the needs and wants of the individual against those of others in society.

There are many different economic systems in the world. They are most commonly defined as existing somewhere along a spectrum with neo-capitalism, a system where there is no government control over the economy, characterized by private ownership and for-profit enterprise on one end, and socialism, a system where the government is heavily involved in regulating the economy and is characterized by communal ownership on the other.

Nevertheless, it seems that as a species, we have failed to realize an equitable distribution of wealth.

According to the World Bank, in 2015, 10 percent of the world’s population, or 734 million people, lived on less than $1.90 a day which it classifies as extreme poverty.[1] On the other end of the spectrum, the world’s richest 1% have more than twice as much wealth as 6.9 billion people.[2] In terms of taxation, only 4 cents of every dollar of tax revenue comes from taxes on wealth.[3] These inequalities manifest themselves as various miseries and disadvantages–lack of education, healthcare, and malnutrition are some of them.

Woodrow Wilson, the 28th President of the United States, summed it up succinctly:

‘The truth is we are all caught in a great economic system which is heartless.’

Seeing as how the economic models we choose to live by have such profound effects on us, and the failure of present models in achieving overall well-being, we should ask whether religion has offered us any solution, one that puts the ‘heart’ back into economic philosophy.

Perhaps of all the major religions in the world, Islam has given the most detailed instructions on how to achieve this ideal. As a complete religion, it provides extensive teachings about all important aspects of human life.

Islam has a system of almsgiving and socio-religious taxation that is extensive in its theory and practice, one that is intricately connected to the Islamic socio-economic system.It is neither a capitalist nor a socialist system, rather it can be seen as a balance between the two. Nevertheless, its underpinnings, unique characteristics, and philosophy make it distinct from other systems.

Spending Money: An Act of Worship in Islam

All money that is spent following the guidelines that Allah has provided is deemed an act of worship and merits a reward. Therefore, the responsible spending of wealth and allocation of resources is a religious duty in Islam.

Amongst the guidelines, we find the importance of providing for the family with the Prophet Muhammad (sa) once declaring that the morsel of food that you place in your wife’s mouth is an act of charity.[4] The repayment of debts, giving dues to the government, giving gifts as well as helping the poor are all treated in detail.

As a result of following these guidelines, one can expect a strong and vibrant economy as well as an environment that fosters mutual relations of trust and kindness. Moreover, Allah states that He will reward a person at least ten times as much as they give in his path,[5] and this can increase up to seven hundred times or even more.[6] These blessings are received both in this world and the next. Therefore, the Islamic economic system is one that focuses on both worldly and spiritual well-being.

The Islamic Economic Model

Islam envisions an economic model where people are rewarded in accordance with their personal efforts and ingenuity, but where the needs of others are not overlooked. Moreover, it seeks to root out the feelings of miserliness, envy, and scorn that sometimes exist between people of different economic classes. It is an economic model that is underpinned with kindness and justice.

Man is permitted to work and enjoy the fruit of his labour, but he has not been permitted to overlook the basic needs of his fellow man. The unjust distribution of wealth through the accumulation of massive amounts of assets in the hands of the few has not been permitted in Islam. At the other end of the spectrum, Islam has also not allowed man to sit idle and expect that others should support him. Moreover, it has forbidden all types of illicit means of generating wealth such as corruption, bribery, and interest.

Seeing its ubiquitous nature and perceived essentiality in the world economy today, some may be surprised to learn that Islam has banned interest.[7] Nevertheless, the shiny veneer of interest hides many unsightly realities. Unbridled greed, hard-heartedness, living beyond ones means, and the strong upward movement and accumulation of wealth in the hands of the wealthy are but a few of the ills that go hand in hand with interest–all of which run counter to the ideals that Islam seeks to develop within society.

Instead of loans being given on interest, Islam envisions that loans be given as an investment or as charity. In this way, the risk is shared between all parties vs. just the debtor. In the standard capitalist economy, accumulation of wealth is rewarded through interest, whereas in the Islamic model, accumulation of wealth is penalized. Essentially, what Islam proposes is a wealth tax to ‘even the playing field,’ so to speak. This tax is known as Zakat.

Details of an Islamic Economy

Islam systematically establishes, with a top-to-bottom approach, how an economy should function and under what philosophy.

It first draws our attention to the idea that all wealth that exists in the world in the form of natural resources belongs foremost to Allah,[8] who is the Creator of this world and all that it contains. Next, it tells us that God has created everything for the ultimate benefit of man.[9] As a custodian and guardian of the wealth of this world, he has been instructed to benefit from it responsibly. He is to work, spend, and distribute the wealth of the world which he has received as a sacred trust in a just manner.

Islam encourages man to be a responsible, compassionate member of his society. Where each person is responsible for his own well-being,[10] he is also responsible to a certain degree for his fellow man, and is taught that those less fortunate than him have a right to a portion of the wealth that he earns, irrespective of whether they ask for it or not. The Holy Qur’an states:

وَفِي أَمْوَالِهِمْ حَقٌّ لِّلسَّائِلِ وَالْمَحْرُومِ

And in their wealth is a share for one who asked for help and for one who cannot.’[11]

Islam dictates that within a society, food, clothing, water, and shelter are basic rights of everyone and must be provided to them.[12]

Moreover, there are a myriad of other needs such as security, transportation, sanitation, etc., that must be provided for the proper functioning of government and society.

To fulfill these needs, Islam has taught a system where people in certain cases, are obliged to hand over their wealth, and in others are encouraged to voluntarily part with it for the greater good. The hoarding of wealth is not encouraged. Rather, systems are put in place to ensure that wealth continuously circulates in society and that there is a strong downward movement of wealth away from the wealthy and towards those who are in need. By taking a portion of the wealth of citizens by right, the legitimate needs of the government and society are met on a day to day basis. Moreover, by encouraging man to give away a part of his wealth voluntarily, Islam develops within society the qualities of compassion, generosity and sympathy, and does away to a great degree with greed and miserliness.

The spending of wealth according to the dictates of God is known as Infaq Fi Sabilillah or spending in the way of Allah.All such spending, even if it seems to not be directly religious, is also referred to as Sadaqat, commonly translated as almsgiving. Sadaqat is the plural of Sadaqah, which is derived from the tri-letter root Sad-Dal-Qaf(صدق). The root meaning implies sincerity and truthfulness.In a similar fashion, Zakat in Arabic denotes purification.Therefore, a person who spends his wealth in the path ofAllah demonstrates the sincerity that exists in his heart for his faith and his fellow man whilst purifying the rest of his wealth in the process.

Hazrat Mirza Ghulam Ahmad (as) was the Promised Messiah and reformer of the age. His purpose was to re-establish human sympathy and godliness in our time through the pristine teachings of Islam. In one place, he stated about Zakat:

‘The root of the word Zakat means purification. When a person who acquires something lawfully and out of it spends in the cause of the faith, the rest of it is purified.’[13]

The Institution of Zakat

The institution of Zakat is perhaps the one which contributes the most to the realization of the Islamic socioeconomic model. Muslims have been repeatedly encouraged in the Holy Qur’an to pay Zakat.[14] It is the minimum obligatory amount that must be given to guarantee the working of the government, the equitable distribution of wealth in society, safeguarding the morals of man and the fulfillment of the needs of religion within the larger socioeconomic Islamic model.

At its core, Zakat is a tax which is levied upon both commercial earnings and personal savings. It can thus be considered a tax which is levied upon the rich, with an eye of returning it to the poor.

In the Qur’an, the holy book of Islam, God explains where these funds are to be spent:

إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللهِ وَابْنِ السَّبِيلِ  فَرِيضَةً مِّنَ اللهِ ۗ وَاللهُ عَلِيمٌ حَكِيمٌ

The alms (Sadaqat) are only for the poor and the needy, and for those employed in connection therewith, and for those whose hearts are to be reconciled, and for the freeing of slaves, and for those in debt, and for the cause of Allah, and for the wayfarer—an ordinance from Allah. And Allah is All-Knowing, Wise.’[15]

The Promised Messiah (as)explained that a primary purpose of Zakat is to alleviate the suffering of the poor:

‘What is Zakat? It is taken from the rich and given to the poor.Zakat thus teaches the highest level of human sympathy. By the coming together of both rich and poor, the Muslim community gains collective strength.The rich are obligated to pay the Zakat. Even if it were not an obligation, human sympathy by itself would demand that the poor be assisted. But nowadays, I see that even if their neighbour is starving to death, people are not bothered in the least; so engrossed are they in their own comfort and enjoyment. I cannot cease from declaring whatAllah has placed in my heart. Sympathy is a very precious gem within man. Allah Almighty says: ‘You cannot achieve virtue until you spend out of that which you love.’…There are many who give to the poor rotten crumbs which are of no use to anyone, and they imagine that they have given charity. Allah does not accept such things, nor is such charity acceptable. He clearly states: ‘You cannot achieve virtue until you spend out of thatwhich you love.’ Virtue cannot truly be called virtue until you spend out of your possessions which you love in the path of Allah for the purposes of the propagation of faith and sympathy for mankind.’[16]

Two Forms of Zakat

There are two forms of Zakat–that which is levied upon commercial wealth and that which is levied upon personal savings.

Historically, Zakat was the primary form of regular taxation that Islamic governments levied. There were distinct rates on different forms of commercial wealth, such as produce, cattle and mining operations.These were referred to as Amwal-e-Zahira (wealth that is observable).

These days, secular governments have implemented other sorts of taxes on commercial wealth and earnings. As such, where such taxes exist, it will not be necessary for Muslims to give Zakat on such wealth that is already taxed, if they are paying what is equal to or greater than what was historically levied during the time of the Prophet Muhammad (as).

The second type of Zakat is that which is levied upon personal savings, known as Amwal-e-Batina (wealth that is hidden). Muslims are obliged to give this Zakat of their own accord, as it is not the responsibility of the government to collect or distribute it. The rate of this tax is 2.5% on personal disposable wealth whose value exceeds 87.48 grams of gold, which according to current rates (July 2020), amounts to approximately 4900 USD.

The way that it is levied is that once someone reaches the threshold, every year on the same date that Zakat first became obligatory upon them, they will be required to see whether they have wealth equivalent or greater than the stipulated threshold. If it is equivalent or more, they will pay 2.5% of the total amount. If it is less, they are not required to pay Zakat. The fluctuations in their wealth before the date of payment are irrelevant. Of course, piety and godliness are necessary in the calculation of Zakat–one should not try and avoid paying the Zakat through last-minute re-allocation of funds.

Certain types of wealth are exempt from taxation. For example, someone’s personal home, jewelry which is in regular use, and precious stones are not counted towards the calculated amount.

Historically, the Zakat was distributed under the auspices of the Prophet Muhammad (sa) and later his Khulafa (rightly guided successors). The Qur’an indicates that the system of Zakat can only truly be implemented when the funds are distributed under the direction of a divinely appointed successor to the Prophet Muhammad (sa).[17] In Islam Ahmadiyyat, Zakat is thus collected and distributed under the direction of the Khalifa (Caliph), the supreme head and spiritual leader of the community. The PromisedMessiah (as) states:

‘He who pays Zakat should send it here. Every person should save himself from vain pursuits and should spend his money in this path. He should show sincerity, so that he be rewarded with grace and the Holy Spirit, because this is the reward that is prepared for those who have entered into this movement.’[18]

The Fifth Caliph and current Worldwide Head of the Ahmadiyya Muslim Community,His Holiness, Hazrat Mirza Masroor Ahmad (aba) explains that the true implementation of Zakat in today’s day and age can only be under the Khilafat (Caliphate) established upon the precepts of prophethood, as foretold by the Holy Prophet (sa). He says:

‘…this Divine promise refers to the Khilafat that was to be established on the precepts of prophethood and with regards to which the Holy Prophet (sa) had clearly mentioned that it would be established following the advent of the Promised Messiah(as). The institution of Khilafat would continue from there as the Promised Messiah (as) would be the Khatam-ul-Khulafa [seal of the caliphs, or successors]. Furthermore, this Khilafat would not engage in wars and cruelties. Rather, it would draw our attention towards observing prayers, towards paying the Zakat for the sake of the propagation of religion and for the fulfillment of the rights of mankind and it would draw our attention towards making financial sacrifices. Thus, presently this institution can only be found within the Ahmadiyya Jama`at.’[19]

Conclusion

Zakat is one of the five pillars of Islam and its purpose is manifold. Through Zakat, Islam ensures the just distribution of wealth in society while not overlooking the legitimate needs and wants of the individual.

About the Author: Azhar Goraya is a graduate from the Ahmadiyya Institute of Languages and Theology in Canada. He is currently serving as an Imam of the Ahmadiyya Muslim Community in Mexico. He is also the Central American Coordinator for The Review of Religions en Español.

  1. The World Bank, Understanding Poverty.https://www.worldbank.org/en/topic/poverty/overview. Accessed July20 2020.

2. 5 shocking facts about extreme global inequality and how to even it up.https://www.oxfam.org/en/5-shocking-facts-about-extreme-global-inequality-and-how-even-it. Accessed July 20 2020.

3.Ibid.

4.

إِنَّكَ لَنْ تُنْفِقَ نَفَقَةً تَبْتَغِي بِهَا وَجْهَ اللَّهِ إِلَّا أُجِرْتَ عَلَيْهَا حَتَّى مَا تَجْعَلُ فِي فَمِ امْرَأَتِك

(صحیح البخاری، کتاب الایمان، باب مَا جَاءَ أَنَّ الأَعْمَالَ بِالنِّيَّةِ وَالْحِسْبَةِ وَلِكُلِّ امْرِئٍ مَا نَوَى، حدیث ۵۶)

You will be rewarded for whatever you spend for Allah’s sake even if it were a morsel which you put in your wife’s mouth.”

(Sahih Al-Bukhari, The Book of Faith, Chapter: What is said regarding the statement: “The reward of deeds depends upon the intention andhoping to get rewards from Allah.”, Hadith #56).

5. [مَن جَاءَ بِالْحَسَنَةِ فَلَهُ عَشْرُ أَمْثَالِهَا  وَمَن جَاءَ بِالسَّيِّئَةِ فَلَا يُجْزَىٰ إِلَّا مِثْلَهَا وَهُمْ لَا يُظْلَمُونَوَنَءبِالْظلَْمََّليَُوهَُهالَََّّْلِمثَِءبِالَّسيِِّئَِةفَََليُْجَزٰىإَوَمنَجا

[6:161]Whoso does a good deed shall have ten times as much; but he who does an evil deed, shall have only a like reward; and they shall not be wronged.

6. مَّثَلُ الَّذِينَ يُنفِقُونَ أَمْوَالَهُمْ فِي سَبِيلِ اللَّهِ كَمَثَلِ حَبَّةٍ أَنبَتَتْ سَبْعَ سَنَابِلَ فِي كُلِّ سُنبُلَةٍ مِّائَةُ حَبَّةٍ ۗ وَاللَّهُ يُضَاعِفُ لِمَن يَشَاءُ ۗ وَاللَّهُ وَاسِعٌ عَلِيمٌ

[2:262] The similitude of those who spend their wealth for the cause of Allah is like the similitude of a grain of corn which grows seven ears, ineach ear a hundred grains. And Allah multipliesitfurther for whomsoever He pleases; and Allah is Bountiful, All-Knowing.

7. يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِن كُنتُم مُّؤْمِنِينَ

[2:279] O ye who believe! fear Allah and relinquish what remains of interest, if you are believers.

8. وَلِله مَا فِي السَّمَاوَاتِ وَمَا فِي الْأَرْضِ ۚ وَإِلَى اللَّهِ تُرْجَعُ الْأُمُورُ

[3:110] And to Allah belongs whatever is in the heavens and whatever is in the earth, and to Allah shall all affairs be returned for decision.

9. وَآيَةٌ لَّهُمُ الْأَرْضُ الْمَيْتَةُ أَحْيَيْنَاهَا وَأَخْرَجْنَا مِنْهَا حَبًّا فَمِنْهُ يَأْكُلُونَ  وَجَعَلْنَا فِيهَا جَنَّاتٍ مِّن نَّخِيلٍ وَأَعْنَابٍ وَفَجَّرْنَا فِيهَا مِنَ الْعُيُونِ لِيَأْكُلُوا مِن ثَمَرِهِ وَمَا عَمِلَتْهُ أَيْدِيهِمْ ۖ أَفَلَا يَشْكُرُونَ

[36:34] And the dead earth is a Sign for them: We quicken it and bring forth therefrom grain, of which they eat.

[36:35] And We have placed in it gardens of date-palms and grapes, and We have caused springs to gush forth therein,

[36:36] That they may eat of the fruit thereof, and it was not their hands that made them. Will they not then be grateful?

10. سُكْمنفَُْيُكْمأَمنُواَعلَِذيَنآََّهااليَُّيَاأ[5:106] O ye who believe! be heedful of your own selves.

11. The Holy Qur’an 51:20

12. إِنَّ لَكَ أَلَّا تَجُوعَ فِيهَا وَلَا تَعْرَىٰ  وَأَنَّكَ لَا تَظْمَأُ فِيهَا وَلَا تَضْحَىٰ

[20:119] ‘It isprovidedfor thee that thou wilt not hunger therein, nor wilt thou be naked.[20:120] ‘And that thou wilt not thirst therein, nor wilt thou be exposed to the sun.’

13. Essence of Islam, vol. 2,pg. 318)(Speeches to Jalsah Salana, 1906, pp. 20-21

14.وَأَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ وَأَطِيعُوا الرَّسُولَ لَعَلَّكُمْ تُرْحَمُونَ

[24:57]And observe Prayer and give the Zakat and obey the Messenger, that you may be shown mercy.

15. The Holy Qur’an 9:60

16.

زکوٰة کیا ہے۔ یُؤْخَذُ مِنَ الْاُمَرَاءِ وَ یُرَدُّ اِلَی الْفُقَرَاءِ۔ امراء سے لے کر فقراء کو دی جاتی ہے۔ ا س میں اعلیٰ درجہ کی ہمدردی سکھائی گئی ہے، اس طرح سے باہم گرم سرد ملنے سے مسلمان سنبھل جاتے ہیں۔ امراء پر یہ فرض ہے کہ وہ ادا کریں۔ اگر نہ بھی فرض ہوتی تو بھی انسانی ہمدردی کا تقاضا تھا کہ غرباء کی مدد کی جائے۔ مگر اب میں دیکھتا ہوں کہ ہمسایہ اگر فاقہ مرتاہو تو پروا نہیں۔ اپنے عیش و آرام سے کام ہے۔ جو بات خدا تعالیٰ نے میرے دل میں ڈالی ہے۔ میں اس کے بیان کرنے سے رک نہیں سکتا۔ انسان میں ہمدردی اعلیٰ درجہ کا جوہر ہے۔ اللہ تعالیٰ فرماتا ہے ۔ لَنْ تَنَالُوا الْبِرَّ حَتّٰی تُنْفِقُوْا مِمَّا تُحِبُّوْنَ۔ یعنی تم ہرگز اس نیکی کو حاصل نہیں کرسکتے جب تک اپنی پیاری چیزوں کو اللہ کی راہ میں خرچ نہ کرو۔۔۔بہت سے لوگ ایسے بھی ہوتے ہیں۔ کہ باسی اور سڑی بُسی توٹیاں جو کسی کام نہیں آسکتی ہیں۔ فقیروں کو دے دیتے ہیں۔ اور سمجھتے ہیں۔ کہ ہم نے خیرات کردی ہے۔ ایسی باتیں اللہ تعالٰی کو منظور نہیں ہیں۔ اور نہ ایسی خیرات مقبول ہو سکتی ہے۔ وہ تو صاف طور پر کہتا ہے۔ لَن تَنَالُوا الْبِرَّ حَتَّىٰ تُنفِقُوا مِمَّا تُحِبُّونَ۔ حقیقت میں کوئی نیکی نیکی نہیں ہو سکتی۔ جب تک اپنے پیارے مال اللہ تعالٰی کی راہ میں اس کے دین کی اشاعت اور اس کی مخلوق کی ہمدردی کے لئے خرچ نہ کرو۔

17. See commentary ofHazratMirza Bashir-ud-Deen Mahmood Ahmad, Tafseer-e-Kabeer (The Grand Exegesis), under24:56, Ayat-e-Istikhlaf

18.

چاہیے کہ زکوٰۃ دینے والا اِسی جگہ اپنی زکوٰۃ بھیجے اور ہر ایک شخص فضولیوں سے اپنے تئیں بچاوے اور اس راہ میں وہ روپیہ لگاوے اور بہرحال صدق دکھاوے تا فضل اور روح القدس کا انعام پاوے کیونکہ یہ انعام اُن لوگوں کے لیے تیار ہے جو اس سلسلہ میں داخل ہوئے ہیں۔

(کشتی نوح ، روحانی خزائن جلد 19صفحہ 83)

(Kishti-e-Nuh (Noah’s Ark), pg. 83, Ruhani Khazain vol. 19)

19. Friday Sermon delivered by Hazrat Khalifatul Masih V (aa) on May 25, 2018

source:  reviewofreligions.org

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