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Islam and Spiritualism ( 2 Oct 2017, NewAgeIslam.Com)

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Reflections on Qur'anic Message - Part-12: Institutional Zakat - The Bedrock of Islamic Socialism Feeds Islamic Capitalism in This Era – God Witnessing

By Muhammad Yunus, New Age Islam

02 October 2017

 (Joint Author) Essential Message of Islam, Amana Publications, USA, 2009

Towards the end of the Prophetic mission, more and more Arab tribes came into the fold of Islam as the truth of the Qur’anic revelation became increasingly clear. Accordingly, the flow of voluntary donations (Sadaqah) into the Prophet’s funds grew substantially leading to a rivalry in the community to get a share from it:

“Among them is one who finds fault with you (O Muhammad) concerning (the distribution of) charity (Sadaqah). If they are given from it, they are pleased; but if they are not given anything, they are angered (9:58).If only they were content with what God and His Messenger give them and would say, "God is sufficient for us! God will give us more out of His grace and bounty, and so will His Messenger. Surely we are supplicants before God(9:59).

Hence, there was a need to structure the distribution of charity (Sadaqah, plural Sadaqat). Accordingly, the Qur’an declares:

“Charities (Sadaqat) are for the Fuqara (poor among the Muslims) and the Masakin (poor among non-Muslims) and the workers (who administer) them, and for those who have embraced faith, and for (freeing) the slaves, for (assisting) the debtors, (for spending) in God's way, and for the traveler (in distress) – an ordinance (Faridah) from God. (Remember,) God is All-Knowing and Wise” (9:60)

The verse declares charity (Sadaqah) as an ordinance (Faridah) and lists a broad category of recipients, conceivably to avoid the undeserving and the influential to claim a share in it.

As the Islamic Caliphate took roots, Caliph Umar institutionalized mandatory charity under the title of Zakat, based on the following pronouncements of the Qur’an: 

“(O Muhammad!). You can now take charity (Sadaqah) out of their wealth that you may cleanse and purify (Tuzakki) them; and pray on their behalf. Surely, your prayers are a source of security for them; and God is One Who hears and knows” (9:103).

“One who spends his wealth to attain to a state of purity (Zaka) (92:18), without having to repay anybody’s favour (92:19), but only to seek the Countenance of His Lord, Most High (92:20) - soon he will be pleased” (92:21).


According to this state-sponsored institution, any Muslim man or woman possessing wealth or asset in excess of a threshold level - 12 English Guinea or equivalent , was required to pay the mandatory charity as Zakat to the Islamic state for distribution among the poor.

The rate or amount of the Zakat was calculated at two and a half percent yearly basis for cash, cattle-head, gold and all trade worthy liquid assets but higher levels were fixed for other contemporaneous assets, depending upon the relative ease in acquiring them. Thus, it was set at 5% on land irrigated by well, 10% on a land irrigated by rain water or by natural water channels Diamond and precious metals are excluded from the traditional list of Zakat-chargeable assets, ironically encouraging the rich to convert their wealth into such Zakat non-chargeable assets. With time, this traditional model has been rationalized at two and half percent for net liquid assets beyond the specified threshold value. And with the secularization of Islamic states, disbursement of Zakat has devolved upon individuals, who calculate it using their own judgment.

With the growth of commerce and industry in recent times, the traditional institution of Zakat suffers the following weaknesses:

  1. It enables exclusion of many capital items of modern highly complex business world from Zakat chargeable category.

  2. Enables exclusion of all kinds of non-commercial personal belongings (apart from gold and jewelry) - such as mansions, cars, furniture fixture, helicopters and jets for example and all kinds of stocks, bonds, financial instruments, long term assets as Zakat non-chargeable.

  3. Enables the rich to spend most lavishly on themselves and their friends and families without having to give any Zakat on their personal extravagances

  4. Absence of any mandatory minimum wage or social benefits or share in profits in many Muslim countries encourage employers to underpay their labor without any compunction or compassion as they redeem themselves of any guilt of financial exploitation by paying Zakat that they can manipulate to their advantage.

  5. It enables the rich to acquire money by questionable or unlawful means and ‘purify’ themselves by giving Zakat.

In sum, the populist model of Zakat in this era is liable to gross manipulation or rationalistic interpretation by the rich, who can become richer and richer without sharing their wealth with the poor in any substantive way. This has created virtually an Islamic Capitalism that frustrates the Qur’anic message on social justice, and widens wealth gap and income disparity between the rich and the poor in practically all Muslim countries. Hence, there is an urgent need to redefine the base and arithmetic of Zakat to bring it in line with the economic order of this era.

Some scholars of Islam suggest reordering of the economic system based on the paradigms of early Islam, but this is a pie in the sky. Human civilization does not march backwards and it is not possible to recreate the economic order of Caliph Umar’s era and have ATMs dispensing dates and cattle-heads instead of currency notes. No wonder, the Qur’an declares:

“Indeed the worst kind of all living creatures in God’s sight are the deaf and dumb, who do not use reason” (8:22).

Part Eleven of the Series:

Reflections on Qur'anic Message - Part-11: Zakah in Qur’anic Epistemology Denotes Care and Concern for Humanity, Including Charity – It Is the Bedrock of Islamic Humanism

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.


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