This soul searching article is an abridged but honed version of an earlier article, ref: http://newageislam.com/NewAgeIslamIslamicIdeology_1.aspx ?ArticleID=5948
By Muhammad Yunus, New Age Islam
Co-author Jointly with Ashfaque Ullah Syed, Essential Message of Islam, Amana Publications, USA, 2009
In the present day Muslim world, Zakat, the Islamic mandatory charity (Sadaqah) is computed on yearly basis at the rate of 2 ½% of liabilities adjusted liquid assets including i) cash and bullion ornaments/bars in hand, ii) readily en-cashable financial instruments, and iii) Profit generating saleable assets like stock of goods in stores and warehouses, rental buildings, public transport, mass communication vehicles. Non-profit generating assets such as vacant land and buildings, residential dwellings, diamonds, rubies, other precious metals, personal motor vehicles and luxury apartments for example are treated as Zakat non-chargeable assets. Conventionally, non-traded fixed assets like farm lands, dairy and poultry farms, plant and machinery are also excluded.
The institution of Zakat is rooted in the Quranic ordinance on mandatory that declares:
“Charities are for the poor Muslims (Fuqra), and the poor of any other religion (masakin) and the workers (who administer) them, and for those who have embraced faith*, and for (freeing) the slaves, and for (assisting) debtors, and (for spending) in God's way, and for the traveller (ibn al-sabil)2 – an ordinance (faridah) from God. (Remember,) God is All-Knowing and Wise” (9:60)
It was established as part of state-controlled poverty alleviation measure at Caliph Umar’s time – almost fourteen centuries ago and was based on the following terms:
• The possession of a minimum asset to make a person liable to pay the Zakat.
• An arithmetical formula to compute the Zakat (as a % of the asset),
• Definition of ‘chargeable’ and ‘non-chargeable’ assets.
The minimum asset was fixed at 5 camels, or 5 awsaq (180 kg) food-grain, or 5 Awaq of silver. (Equivalent 22 Fransa Riyals of Yamen or 200 Dirhams), or 12 Guinea (English) of gold or equivalent 
The assessment of Zakat payable by a person was calculated both on barter and % basis. Thus, for example it was one four year old she-camel for every 61 to 75 fully grown camels, while sheep and younger she-camels (one, two, three year old) were substituted for possessing 5 to 61 camels in prescribed slabs . A flat 2 ½% was charged on bullion possessions. A higher rate was charged on items that were produced by natural process and did not require much labour: 5% on land on irrigated by well, 10% on a land irrigated by rain water or by natural water channels .
During the period of first Islamic Caliphate (the first four decades of Islam), it was difficult for people to manipulate the Zakat due to the following historically informed factors:
1) Concealment of one’s liquid assets was difficult due to the their visibility and exact accountability (cattle-heads, farm produce),
2) Difficulty in converting one’s Zakat chargeable produce/ assets into Zakat non-Chargeable category for want of avenues of long term /hidden investments.
3) Limitations in extravagant consumption of one’s liquid assets for want of avenues of consumption: life was simple and austere dictated by Qur’anic exhortations against extravagance and acute paucity of consumable products - which were restricted to bare essentials like food, clothing, water casket, basic domestic tools for example.
4) An ascending rate of Zakat (from around 1% on the profit generating asset, notably camels and cattle, 2 ½% on bullions, 5 to 10% on easily obtainable produce of nature)
5) The exclusion of the rich and the state from its share.
6) Payment of fair wages to the employees if engaged as commanded by the Qur’an.
At the same time, the living costs for the poor were extremely low as they lived in make-shift tents, had very meagre personal possessions and incurred practically no expenses for maternity, child education, healthcare, entertainment and conveyance. Besides, the rich often provided them food in compliance with the Qur’anic emphasis on feeding the poor.
These conditions conduced to a substantive reduction in poverty. The institution of Zakat thus played a revolutionary role in poverty alleviation of the masses, and rendered Islam an epitome of social justice. However, as it happens with all revolutionary ideologies and schemes, introduced at any juncture of history, their impact erodes with passage of time and change of civilisational paradigms. In the case of the institution of Zakat, the underlying factors governing the Zakat and wealth distribution are virtually reversed today as illustrated below:
1) Concealment of one’s liquid assets: The business tycoons and industrialists can easily undervalue their liquid assets, as unlike in early Islam they are not limited to some countable items, and moreover, their assessment is left to a Zakat payer’s own discretion.
2) Conversion of Zakat chargeable produce/ assets into Zakat non-Chargeable category: there are countless avenues of investment for such a manipulation.
3) Consumption spree: The rich obsessively buy all kinds of personal non-Zakat chargeable items from Italian furniture to flashy cars, luxury apartments in their countries and abroad for occasional use, and spend lavishly on travelling, recreation, wedding and social parties, health-care and education and grooming of their children and constantly acquire latest models of domestic appliances (Fridge, TV, Washing Machine....) and IT (I-Pods I-Pads, laptops, digital cameras ...).
4) % reduction in Zakat amount: The Zakat is calculated at the flat rate of 2 ½% even over the profits such as bank fixed deposits and stocks that accrue in the natural process, without input of any personal labour.
5) Payment of wages to the employee/ labour: Muslim employers and industrialists tend to pay the bare minimum to their labour to maximize the profit, for later purifying it by paying the Zakat.
6) Food subsidy: The notion of feeding the poor - industrial labour and employees in today’s context is almost non-existent.
7) Cost of living relating to the essentials of life is substantial, and ever increasing.
This reversal in the operating terms of the Zakat has virtually reversed the role of this poverty alleviating institution into a poverty promoting institution - at least in many third world Muslim countries.
Does the reversal in Zakat’s role render Islam an antiquated faith?
Had the traditional model been prescribed by the Qur’an, this question had relevance. As far as the Qur’an is concerned, it uses the word Zakah and its other roots in versatile manner. In many of its verses, the Qur’an pairs its injunction to keeping up prayer (salah) with the exercise of Zakah, thereby enjoining it on all believers, regardless of income . Accordingly, the Meccan Muslims, the ancient prophets and the wives of the Prophet who were all mostly wanting in material resources were asked to exercise Zakah . The Qur’an, however, also connotes Zakah with the purifying of one’s wealth by giving charity .
These illustrations suggest that the Qur’an uses the word Zakah for all kinds of humanitarian deeds. Thus all believers, rich and poor, can exercise Zakah by showing mercy and extending emotional and psychological support to distressed humanity, by caring and nursing the sick and wounded, and other similar gestures, while the rich must also give the mandatory charity (institutionalized Zakat) as part of their Zakah obligation.
Traditionally, various civil works, such as removing garbage from roadside, planting trees, giving a helping hand in lifting luggage to a mount, helping out someone in need of help, or even doing good deeds were regarded as Sadaqah , which is integral to the broad Qur’anic concept of Zakah. Therefore, in the historical and present day context, all civil and social welfare activities and scientific achievements that mitigates the sufferings of people, or is otherwise beneficial to humans fall in the domain of Zakah. There are also traditions on the merit of looking after domestic pets as well as any animate . Thus, the Qur’anic notion of Zakah is far more outreaching and expansive than that of the institutional Zakat that is regarded as a pillar of faith. Therefore, the reversal of the role of the traditional Zakat does not outdate the Qur’an but only shows that with drastic changes in the paradigms of civilization and economic order of the world; the historically derived institution of Zakat has run out its course. However, the devout Muslim who wants to meet his Zakat obligations in its nascent altruistic spirit must pay up to 5-10% on all easily earned profit after deducting living and personal expenses that he must curtail to attain the purity of his soul – though God knows best.
Conclusion: In the backdrop of all pervasive consumerism and non-Zakat chargeable investment avenues, minimal labour wages and social benefits, and soaring cost of living that characterise the present day global economy, the traditional model of Zakat as an instrument for poverty reduction is a grand mockery if not fraudulent realization of Qur’anic message on wealth distribution and social justice. Instead of alleviating poverty, it is now promoting poverty and making the rich, richer and blocking their conscience against grossly underpaying their employees/ labour and keeping them below the poverty line. Thus, what used to be a strong and sacred Pillar of faith epitomizing wealth distribution and social justice has now become hollow and rusted and negates the very object of the Qur’an.
1. Sahih al-Bukhari, Volume 2, Book 24, Number 526, 538.
2. Ibid; Vol. 2, Book 24, Number 534.
3. Ibid., Vol. 2, Book 24, Number 560.
4. 2:83, 2:110, 2:177, 2:277, 5:55, 22:41, 22:78, 24:37, 24:56, 27:3, 31:4, 98:5.
5. 21:73, 23:4, 33:3.
6. 9:103, 92:18.
7. Sahih al-Bukhari, Vol.2, Acc. 524; Vol.3, Acc. 513; Vol.4, Acc. 232.
8. Ibid., Vol.1, Acc. 174; Vol.3, Acc. 551.
Muhammad Yunus, a Chemical Engineering graduate from Indian Institute of Technology, and a retired corporate executive has been engaged in an in-depth study of the Qur’an since early 90’s, focusing on its core message. He has co-authored the referred exegetic work, which received the approval of al-Azhar al-Sharif, Cairo in 2002, and following restructuring and refinement was endorsed and authenticated by Dr. Khaled Abou El Fadl of UCLA, and published by Amana Publications, Maryland, USA, 2009.
Dear Wahab Hashem Sb,
Thank you for swallowing a bitter pill of populist Islam gracefully. At
another occasion when I pointed some gross weaknesses in present day Islam, I
received this remark from a learned commentator: "The call to fight evil is an
obsession with mere survival "which always in human history has led to
death for both individuals and entire communities".
Ref: Muslim Leadership in the Harmony of Justice
Janab Mohammad Younus Sb: Thanks for your clarification, sir. I got it that anyhow it is in practice since the age of Khulafa-e-Rashedeen (AS). The Zakat evaders can practice even today as follows as Zakat is not payable on the following properties. a) Personal residential houses even if they are more in number meant for residential purposes only.b) Property given on rent irrespective of the numberc) Agricultural land, if meant for agricultural and farm house (if any) on agricultural land, servant quarters, go-downs, tractors, bullocks and all implements for use at the farm.d) Open land owned with the intention of building a house in future for self or for the benefit of the family. Zakat is payable on the properties held with an intention to sell at a future date for a profit or as an investment.
We agree with you, there is not even slightest assumption; anybody can imagine to convince Allah Kareem with his logics of evading Zakat. All rules and techniques employed accordingly to avoid paying Zakat is for the worldly affairs only. The moments eyes closed hearbeat stopped, all worldly wisdom and logics finished before Malak-ul-Maut. Thanks, it is better if you guide me some more.
Very useful article by Janab Younus Sb who has been a guiding force for all the negligent people.
ZAKAT is a purifier of wealth which can not be lost or harmed if its sactity is maintained starting from the basic requirements. There is no limit of benevolence for a sympathetic heart, our SAHABA-E-KARAM (mAbpwth) used to distribute all the remaining earning of the day before sleeping as if they died at night how would they justify the left amount. They believed there is no need to think about tomorrow as ALLAH KAREEM is the PROVIDER, AND he will of course, provide.
It was the fear of Allah and concern for their righteousness that has taken them close to Allah. So if we want to agree ALLAH, let us start with the bare minimum 2.5%, I appreciate the opinion of Mr Manzoorul Haque in this regard.
Haque saheb, if you like the 2.5% rule, that is fine with me. The only message from Islam for me in this regard is that charitable giving to the needy is encouraged.