Supplementary Notes About Zakat

(1) Zakât is Not a State Tax

As already mentioned in the foregoing chapter, the scope of zakât is clearly set forth in the Glorious Qu’ran, and, therefore, must not be confused with other forms of compulsory taxes imposed by the State on its Muslim and non-Muslim citizens alike.

In the first place, zakât is not a tax imposed by the State. Nor is zakât a tax destined to the State as such. The very nature of the institution of zakât requires that the part, which the State is to play in the function there of, is merely one of “Supervision” and not of full control, as is the case where government taxes are concerned.

The difference between supervision and full control is that the latter would imply the right to increase or modify the tax, to extend or limit its scope, to suspend the imposition thereof, or even to abrogate it altogether, whereas, in its role of supervision, the right of the State is only to enforce observance of the Divine Law as directed by the precepts of the Qu’ran and the instructions of the Prophet.

(2) Practical Application of Zakât

Zakât attaches exclusively to productive wealth; that is wealth represented by: -

1) Agricultural produce.  

2) Pasturing domestic animals.

3) Things constituting ready medium of exchange, such as silver, gold, and money invested [in trade capital, in cash, and articles of merchandise] or kept as savings.

The law of zakât considers the productivity of wealth as either potential or actual, the former, existing in such wealth as silver, gold, and money kept as savings, and the latter is actual productivity existing in such wealth as agricultural produce, pasturing domestic animals and invested money, i.e. trade capital in cash and articles of trade.

(3) Cause and Object of Zakât Act

The cause of Zakât act is the productivity of wealth existing in a quantity, number, or value, equal to or above the established minimum taxable limits. The object of Zakât is the profession of Islam by the legitimate owner of wealth under taxation.

(4) Responsibility For Zakât Payment

Zakât is an act of worship; it being an obligatory impost on Muslim-owned wealth, the zakât must be discharged regardless of age or state of mind. Where adult Muslims are concerned, the responsibility devolves directly upon the legitimate owner of the wealth; where minors or insane persons are concerned, it lies with the legal guardian or custodian thereof, as the case may be. Where the zakât of wealth belonging to minor children is concerned [as, for example, in the case of wealth inherited from the mother], the responsibility for the payment of dues rests with the person entrusted with the care and administration thereof [i.e. the child’s father, or any other responsible person] until the child comes to full age. The same ruling applies to Muslim orphaned children or insane Muslim men or women, where the responsibility of payment of zakât rests with the legal guardian or custodian as the case may be.

Trade capital, that is to say both the reserve and working capital [i.e. money and articles of trade] belonging to individuals or companies, is also subject to the payment of zakât, wherever its value is equal to or above the minimum taxable limit.

Where private ownership of business concerns is involved, responsibility for the payment of dues rests with the owner or owners; where endowments are concerned, such responsibility rests with the individual or committee entrusted with the administration of the establishment or concern in question.

(5) Exempt From Zakât Dues

It is one of the fundamental doctrines of Islam that the needy and poor citizens of any Muslim community have an inherent right in the wealth of every Muslim of means, and nowhere in the Qu’ranic text is any justification to be found for exempting the wealth owned even by minors, orphans or persons of unsound mind.

However, all establishments privately owned or endowed, which are either totally devoted to charitable purposes [i.e. hospitals, orphanages, homes for the poor, disabled and old people, etc.], or to the service of humanity [i.e. scientific research, free educational institutions], are naturally exempt from the obligation of paying zakât, as by their very nature they fulfil the purpose to which the proceeds of zakât are dedicated. Likewise wealth which has been purposely set aside to cover the expenses of a first pilgrimage to the Ka’ba is exempt from zakât, regardless of the period of time during which it remains suspended. Subsequent pilgrimages being purely optional, wealth set aside to cover expenses of the same is considered as savings, and, therefore, it is subject to zakât where the quantity or value is equal to or above the minimum taxable limit.

(6) Factors of Responsibility

The person subject to zakât must be:

a) An avowed Muslim [non-Muslims being exempt from such zakât].

b) Of sound mind.

c) A person enjoying full freedom of action. If for any reason, he/she be under any kind of constraint, his or her responsibility remains suspended until full freedom of action is recovered.