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All rights reserved. No part of this document may be reproduced or transmitted in any form or by any

means, electronic, mechanical, photocopying, recording, or otherwise, without prior written

permission of Imam Ahmad Hamid.

 

 

ZAKAAH: A STRONG ECONOMIC

INSTITUTION

 

Ahmad Hamid

 

Ramadan is the ninth month of the Islamic lunar calendar. During the month, Muslims engage in

various acts of worship (ibadah) They seek every opportunity to increase their Iman. They fast, perform

Salaah, observe itikaaaf (seclusion in the Masjid during the last ten days of Ramadan), and seek Lilatul

Qadr, recite the Quran, and distribute charity. Their intention is to gain God’s blessings, mercy, and

forgiveness and thereby earn a place in His eternal Jannah.

Ramadan is the month of charity. Muslims and organizations on a local, national, international,

and a global scale seek to pay, collect, and disburse Zakaah. Organizations use every conceivable means

of communication to solicit Zakaah. In doing so, they indicate the projects on which Zakaah has been and

will be expended. Zakaah is a fundamental principle, a pillar of Islam, and a very strong economic

institution. It is neither socialist nor capitalist. It is unique and not found in its form in any religion.

Zakaah is not charity. It is direct taxation on one’s wealth that has been in possession for one lunar year.

Once the savings mature, the Zakaah should be paid.

Muslims show a preference to give the Zakaah in Ramadan because of the multiplier effects of

the blessings received during Ramadan for good deeds. The rationale for the payment of Zakaah is to

reduce the gap between the rich and poor, discourage hoarding and encourage investment with a constant

flow of wealth in a money market.

In an agricultural society, we have to consider the payment on all forms of money, gold, silver,

stocks for trade, sheep, goats, cows, camels, and grains. Zakaah is payable also on mines. New York is an

industrial and commercial society with a money market; therefore, this article deals specifically with an

industrialized money market society, which is a free capitalist market.

Zakaah is to be paid by Muslims only and must be given to Muslims only. In the time of Abu

Bakr ®, the state assumed the responsibility for the collection and disbursement of Zakaah. By the time

Omar ibn Aldelaziz ® (regarded as the fifth Khalifah),it was no longer handled by the state. Ever since it

has become a personal responsibility. From a religious perspective, Zakaah means a purification of wealth

and the soul. Its non-payment carries damnation in the hell fire. If Muslims reject it, then they are placing

themselves outside the pale of Islam. As a personal responsibility, it carries with it conviction, honesty,

and religious compulsion to pay the full amount. The Quran does not state the percentage to be paid as

Zakaah nor the items on which Zakaah is levied.

Let me digress a little. One article boldly states “Islam Solves World Poverty and Hunger”.

Several Muslim articles bear similar statements to this effect. May 28, was declared World Hunger Day

2013, and an organization called Muslim Aid “calls upon the international community to take action

against hunger wherever it is found in the world.” Hi! How about focusing on the Muslim world? How

difficult is it to develop and implement workable economic system to meet the needs of the Muslims?

Why go global when Muslim organizations and “Islamic” governments give a lamentable and ridiculous

performance in attending to their domestic economic crisis?

Articles speak of poverty, hunger, sickness, death, and the millions living under sub-human

conditions. Such articles condemn the rich, and then without really thinking speak of the glory of Islam

and how Zakaah eradicated poverty 1400 years ago. What! Are we living in the past? Wake up! Stop

blabbering about past glories. It’s history. Use the intellect and our resources to make Zakaah workable

in the 21

 

st century for “Within the 60 poorest nations of the world live 60% of the Muslim world. 75%

of the world’s refugees come from Muslim nations. More than half of the world’s poor and needy are

Muslims.”

 

Muslims have the largest percentage of illiterates. Zakaah is so powerful, yet it is not solving

the social and economic conditions of hundreds of millions of Muslims who are suffering every minute of

the day. Why?!

Let’s move on. Quran has declared that eight categories of people can accept Zakaah: (1) Fuqara,

(2) Al-Masakin, (3) Zakaah Collectors, (4) those inclined to Islam, (5) those in bondage; (6) those in debt,

(7) Fisabilillah – in the way of Allah, and (8) the wayfarer (Q9:60).

 

 

The law states that Muslims in

possession of the Nisaab are commanded to pay Zakaah and cannot accept Zakaah. If someone pays

Zakaah to an illegal recipient, then it becomes invalid and it has to be paid again.

Now of these eight categories, I have eliminated the slave, wayfarer, administrators, fisabilillah

and those inclined to Islam. Umar ibn Alkhattab ® had refused to give Zakaah to those inclined to Islam.

He reclassified them into the category of the poor and needy if they qualify. We are left with the real poor

people, (i) Fuqara (living in absolute poverty) and (ii) Masakin (living at subsistence or below subsistence

level, cannot meet their needs), and the stranded wayfarer who is qualified to receive Zakaah. Can we

liken this category to illegal immigrants or those who have come recently and are actually unemployed?

Please go with me for my conclusion may strike you as a joke, but be reminded that the

interpretation, application of the Shariah, and ijtihad are the domains of the Ulema (Islamic theologians).

Articles, books and lecturers always say Zakaah is to be paid by the rich and given to the poor. Who is

poor and who is rich? It is imperative that when we deal with subject of Zakaah, Sadaqatul Fitr, charity

and donations that we first know our world, the Muslim world.

We often brag about our numerical strength of 1.2 - 1.7 billion. The Prophet (S) compared this

number to the foam on the seashore. It is very disturbing to know that “Indonesia, Bangladesh, Pakistan,

Nigeria and Egypt account for over half a billion (528 million) of the world’s poor with incomes below $2

a day or below their national poverty lines. All these countries except Nigeria have Muslims constituting

over 95 per cent of their respective population. With another five countries - Afghanistan, Sudan,

Mozambique, Turkey and Niger, they account for over 600 million of the world’s poor.” Another

shocking fact is of the 44 OIC member countries, a small percentage has access to financial services.

Zakaah is obligatory on the rich and must be given to the poor. In context of NYC, Zakaah is

payable annually on all forms of money, gold, silver, and stocks for business, e.g., a supermarket goods at

the rate of 2.5%. Now who is poor and who is rich? One definition is “Poverty is a state of privation, or a

lack of the usual or socially acceptable amount of money or material possessions.

 

Is the standard to

measure the poor in a third world country the same as the USA? “The (US) government’s definition of

poverty is based on total income received. For example, the poverty level in the USA for 2012 was set at

$23,050 (total yearly income) for a family of four.” In 2013, the poverty line for a family of one is

$11,490 and for a family of four $23,550. Are these people rich or poor? The standard of living and the

cost of living in NYC reflect the needs of a family. Whom do we classify as rich and poor?

The claim of being poor does not qualify Muslims as recipients of Zakaah. For any person who

wishes to accept Zakaah, he must subject himself to full investigation to ensure he qualifies. Many make

it a business each Ramadan to solicit Zakaah although they are not qualified to receive Zakaah. Their

bank account is way above the Nisaab. They go from Masjid to Masjid making a case with pitiful stories

and convincing tears.

Let me state a few points. Based on our blood relationship, we cannot give Zakaah to our parents,

grandparents, children, or grandchildren. However, Zakaah can be given to relatives (cousins, nieces,

nephews, aunts, brothers, sisters, and uncles). If person pays Zakaah his children are disqualified to

receive Zakaah. Zakaah cannot be used to pay a dead person’s debts or salaries, build a Masjid, bury the

dead, construct a building, or make an investment. Paying taxes is not an excuse for not paying Zakaah.

Zakaah is payable on personal jewels whether it worn daily or not. Zakaah is not levied on items for

business, e.g., motor vehicle, homes for rent.

There are Fuqara and Masakin in NYC. They require our immediate attention. It is not lawful to

send our Zakaah elsewhere and thereby deny the poor and needy who are the legal heirs. They have a

greater right upon us than anyone else except our relatives. Each year, organizations and individuals take

home from our community in excess of $125, 000 to sustain growth and development or their

organizations. These organizations are far better structured than our community in NYC. They have a

headquarters, paid office and filed staff, schools, vehicles, and a highly efficient system for disbursement

of Zakaah. What do we have? Wherein is the wisdom? We give freely without realizing the consequences

of failing to establish simple means of taking care of our affairs and preparing a future for our children

and grandchildren. Imagine what $125,000 can do to help the Muslims in NY. It is time we take care of

ourselves and establish the means of doing so. We need right now all the funds we can get for our

projects, e.g., building a Masjid, operating a headquarters, and providing a quality education in the

Madrasah. Let us unite in this effort so we can be organized to handle our business efficiently thereby

enjoying development and respect from other Muslim communities. .

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