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Zakat: A Research into The Third Pillar of Islam - Charity and Tax

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Table of Contents

01. Summarising The Third Pillar Of Islam - Zakat

Zakat is both charity and tax. Zakat is considered charity - when paid voluntarily, without specifying an amount. But Zakat is also a tax - if a specific amount is requested by the State. Zakat was initially a voluntary contribution, that eventually became an obligatory duty.

The spiritual and philosophical understanding of charity from an Islamic perspective, is that charity is a loan to God, which Allah will return to you with a manifold increase. And charity is anything you give or do with the hope of earning a recompense from our Lord. Notwithstanding, philanthropy is also an exceptionally good deed – but only if you avoid poverty for yourself and family.

Zakat in the sense of tax, is an obligatory sum that is paid by the rich to the State; the primary objective of which - is to allieviate local poverty through the creation of a Welfare State. Lastly, the political consequence of not paying tax is severe; as is the spiritual fallout.

02. What Are The Expert Definitions Of Zakat?

  • One of the five pillars of Islam is Zakat, which means purification and increment of one’s wealth. A Muslim who has money beyond a certain quantity is to pay Zakat. It is also called the alms due or poor due. It is to be used in eight categories for welfare of the society that are mentioned in the Quran, namely: the poor, the needy, the sympathisers, the captives, the debtors, the wayfarers, in the cause of Allah, and for those who are to collect it. The Zakat is compulsory on all Muslims who have saved (at least) the equivalent of 85g of 24 carat gold at the time when the annual Zakat payment is due. The amount to be collected is 2.5%, 5%, or 10%, depending on the assets and the method used to produce it. For example, it is 2.5% of the assets that have been owned over a year, 5% of the wheat when irrigated by the farmer, and 10% of the wheat that is irrigated by the rain.[1]
  • Zakat literally means augmentations and increase, it also means purification, praise and righteousness. The due amount paid on wealth is called Zakat because it increases the wealth in blessing and purifies the giver. It is an obligation due on particular types of properties and given to specific categories of Muslims at a specific time.[2]
  • One meaning of Zakat is purifying and cleansing and the other meaning is refinement, increase and growth. This applies to the obligatory and voluntary charity, household and other living expenses, and fulfilment of financial obligations. It also applies to the things that are more than what is needed.[3]
  • A certain fixed proportion of the wealth and of every kind of the property liable to Zakat of a Muslim to be paid yearly for the benefit of the poor in the Muslim community. The payment of Zakat is obligatory as it is one of the five pillars of Islam. Zakat is a major economic means for establishing social justice and leading the Muslim society to prosperity and security.[4]
  • Linguistically, Zakah means growth or purification. In sacred law, it is the name of a particular amount of wealth that must be paid annually to the poor, the indigent and to the other needy persons, with the intention of gaining recompense.[5]
  • Zakat is one of the five pillars of Islam. It is a wealth tax paid on certain forms of wealth: gold and silver, staple crops, livestock, and trading goods.[6]

03. What Is Zakat?

Zakat is both charity and tax. When Zakat is paid voluntarily without specifying an amount - it is a charity. However, when a specific amount of Zakat is requested by a government – it is a tax.

04. How Is Zakat A Charity?

The two most common words in the Quran depicting charity is Zakat and Sadaqa. One meaning of Sadaqa is sincerity, and one meaning of Zakat is purification. Zakat and Sadaqa were two newly invented words (to describe charity) which entered Arab vocabulary due to the advent of the Quran.[7] But that is not to say that the two newly invented words (Sadaqa and Zakat) caused the Arabs to suddenly become charitable or more charitable; because a well-known virtue and trait of the Arabs prior to Islam was of being hospitable and charitable.[8] However, with the advent of Islam and the Quran and the invention of two new words depicting charity (Zakat and Sadaqa), charity was given a philosophical outlook with a deeper spiritual meaning.

05. What is The Philosophical And Spiritual Understanding Of Charity?

A philosophical and spiritual understanding of charity is that it is a loan to Allah, and Allah will return your funds with a manifold increase in this life and/or in the afterlife. In other words your loan/charity to Allah will be returned to you again - multiplied in this worldly life and/or augmented in the afterlife by God Himself. Man’s intention should be to lend and give to God through charity with the belief in seeing a return on his investment with growth from Allah – yield in this worldly life and/or in the afterlife. Perhaps the reason ‘why’ Allah considers charity as a refundable loan (to God) is because Allah knows the human disposition; in that man does not like to give something in exchange for nothing. Therefore, Allah considers charity as a loan unto God which will be returned to Man with a manifold increase; thus making charity a transactional deed - based on faith between Man and God. In essence, your charity falls into Allah’s hand before it falls into the hands of the needy.[9]

Who is he that will lend to Allah a goodly loan so that He may multiply it to him many times?...

— QURAN, SURAH AL-BAQARAH 2:245, TRANSLATED BY: SAFIUR-RAHMAN AL-MUBARAKPURI [10]

Furthermore, Zakat in the sense of charity is also considered to be a purifier of wealth, without purification of wealth by way of giving in charity, all your wealth remains impure.[11]

06. Should Charity Be Given Secretly Or Publicly?

It is better to give charity – secretly, but it is not wrong to give charity - publicly. There are times when you give charity in secret, and there are times when you give charity in public. As an individual you will need to judge a situation and decide for yourself as to whether to display your generosity or hide it. There is no right or wrong attitude as to whether you donate secretly or publicly as it all depends on your intention and the reading of a situation.

If you disclose your Sadaqat (almsgiving), it is well; but if you conceal them and give them to the poor, that is better for you…

— QURAN, SURAH AL-BAQARAH 2:271, TRANSLATED BY: SAFIUR-RAHMAN AL-MUBARAKPURI [12]

07. Why Should Charity Be Given Secretly?

A reason as to ‘why’ charity should be given secretly is because Muhammad (saw) said that Allah will provide shade (on the Day of Judgement) for the one who practises charity in secret.

…Allah will give shade to seven, on the Day when there will be no shade but His. (These seven persons are:) [1]… [2]… [3]… [4]… [5]… [6] a man who gives charitable gifts so secretly that his left hand does not know what his right hand has given (i.e. nobody knows how much he has given in charity), and [7]…

— SAHIH BUKHARI, HADITH NUMBER: 660 [13]

Furthermore, God also said that to give charity in private is better than public (see Tafsir Ibn Kathir (Abridged) QURAN, SURAH AL-BAQARAH 2:271)[14] Also, other than the spiritual benefit of concealing your charity from public knowledge, there is also an earthly benefit in concealing your alms from the public eye,[15] particularly if you are blessed with donating large sums of wealth. If you are wealthy, then, it is not always wise to disclose your monetary worth openly in front of strangers because you risk the danger of encouraging thieves, fraudsters and/or scroungers to make approaches unto you. Hence perhaps ‘why’ in the earthly sense it is better to keep your substantial charity donations a secret – likewise in the spiritual sense it is also better to keep all your charity donations a private matter (between Man and God). Allah knows best.

08. Why Can Charity Be Given Publicly?

A reason as to ‘why’ charity can be given publicly, is because Muhammad (saw) during his lifetime – held public fundraisers which benefited the poor. And notable donors such as Umar (ra), at fundraisers would seek to compete with his good friend – Abu Bakr (ra). It is therefore evident, that at public fundraisers, it is commendable to openly compete with one-another so as to raise a generous sum for charity.

…Umar (ra) said: We were ordered by the Messenger of Allah (saw) to give in charity, and that coincided with a time in which I had some wealth, so I said, “Today I will beat Abu Bakr (ra), if ever I beat him”…

— TIRMIDHI, HADITH NUMBER: 3675, GRADED: HASAN [16]

A well-known virtue and trait of the Arabs, even prior to Islam was of being both hospitable and charitable;[17] and the Arab people held in esteem those that were generous.[18] Therefore, in Arab culture, the generous are considered to be both honourable and commendable; and the one who donates alms is better than the one who receives charity.

…The upper hand is better than the lower hand. The upper hand is that of the giver and the lower (hand) is that of the beggar…

— SAHIH BUKHARI, HADITH NUMBER: 1429 [19]

09. When Should Charity Be Given Secretly And/Or Publicly?

If you are donating to a family or friend, then, it is perhaps wise to donate secretly so as not to cause the recipient embarrassment as well as keeping the beneficiaries self-esteem intact. However, if you are at a public fundraiser and raising funds for strangers, then you may decide to donate publically and openly so as to encourage others to also participate and compete towards the virtue that is ‘charity and generosity’. Destitute recipients of public charity – witnessing random acts of kindness from strangers, may bring glee and momentary respite to the troubled hearts and minds of the impoverished; and helping anyone in need will one-day bring benefit to the donor in this life and/or the afterlife.

In essence, donating charity in secret is perhaps best suited towards family and friends, if you suspect that public knowledge of your donation will cause embarrassment and/or low self-esteem to the recipient. And public donations is best suited at charity fundraisers so as to both motivate and encourage others to participate; as well as bringing relief and glee to the recipients upon witnessing compassion at the hands of strangers. Notwithstanding, it is not always wise to disclose your monetary worth openly in front of strangers because you risk the danger of encouraging thieves, fraudsters and/or scroungers to make approaches unto you. Allah knows best.

10. How Generous Should One Be When Giving To Charity?

One should donate as much or as little as one can afford, ensuring one does not overburden himself to the point that you or your family resort to begging or become impoverished.

…Spend (in Allah’s Cause) as much as you can afford…

— SAHIH BUKHARI, HADITH NUMBER: 1434 [20]

…”I am wealthy and have no inheritors except a daughter. Should I give two-third of my property in charity?” He [Muhammad s.a.w.] said, “No.” I asked, “Half?” He [Muhammad s.a.w] said, “No.” then he [Muhammad s.a.w.] added, “One-third, and even one third is much. You’d better leave your inheritors wealthy rather than leaving them poor, begging others…

— SAHIH BUKHARI, HADITH NUMBER: 1295 [21]

However, one could also argue that giving everything one has to charity is an exceptional act of faith, as Abu Bakr (ra) demonstrated by donating his entire wealth to charity. However, even though Abu Bakr (r.a.) on an occasion donated all his wealth to charity, I could not find any evidence that suggests - Abu Bakr (r.a.) or his family became impoverished or resorted to begging due to such a generous donation. This suggests, that perhaps, Abu Bakr (r.a.) could afford to donate everything he had, because, he had a steady source of income and confidence to recoup his donation without bankrupting himself or his family. Allah knows best.

…We were ordered by the Messenger of Allah (saw) to give in charity… Abu Bakr came with everything he had, so he [Muhammad s.a.w.] said: “O Abu Bakr! What did you leave for your family?” He [Abu Bakr r.a.] said: “I left Allah and His Messenger for them”…

— TIRMIDHI, HADITH NUMBER: 3675, GRADED: HASAN [22]

In summary, one should donate towards charity that which he can afford to give without causing himself or his family to become impoverished. Philanthropy by way of donating everything or much to charity is an exceptionally good deed, but, such an exceptional deed of charity is not the norm and is only noble if you avoid poverty for yourself and family.

11. What Is Charity?

The most obvious form of charity is a monetary contribution, but, it is also possible to be charitable via carrying out acts of goodness that are free of cost. Every good deed is charity, for example; a smile is charity,[23] being fair is charity, helping others is charity, speaking goodness is charity, walking to the mosque is charity, removing litter is charity,[24] etc. A reason as to ‘why’ acts of goodness that are free of cost is also considered charity, is because the objective of a financial donation is the same as a cost-free act of goodness, – which is the hope of earning a recompense from our Lord.[25] Therefore, everyone can be selfless and charitable albeit financially or via an act of goodness; and everyone should seek to do charitable works and deeds in accordance with one’s ability whether it be financially and/or otherwise so as to receive a recompense from our Lord.

…To judge justly between two persons is regarded as Sadaqa (charity), and to help a man concerning his riding animal by helping him to ride it or by lifting his luggage on to it, is also regarded as Sadaqa (charity), and (saying) a good word is also Sadaqa (charity), and every step taken on ones way to offer the congregational Salat (prayer) (in the mosque) is also Sadaqa (charity), and to remove a harmful thing from the way is also Sadaqa (charity).

— SAHIH BUKHARI, HADITH NUMBER: 2989 [26]

12. Who Should Give To Charity?

To give Zakat in the sense of charity (Sadaqa) is a voluntary obligation upon all Muslims albeit rich or poor. Every Muslim albeit rich or poor is committed to being charitable either financially (by donating as much or as little as one can afford); and/or via charitable acts of goodness such as helping others.[27]

…Whenever Allah’s Messenger (saw) ordered us to give in charity, we used to go to the market and work as porters and get a Mudd (a special measure of grain) and then give it in charity. (Those were the days of poverty) and today some of us have one hundred thousand.

— SAHIH BUKHARI, HADITH NUMBER: 1416 [28]

However, to give Zakat in the sense of a government tax is an involuntary duty levied upon Muslims by the State, and is only a requirement upon those Muslims that have reached the Zakat threshold at the time when the annual Zakat payment is due.[29] In essence, to be charitable is a voluntary duty imposed upon all Muslims regardless of one’s financial worth, but, Zakat in the sense of a government tax is involuntarily levied by the State upon only those Muslims that are deemed financially able to make payments.

13. When Is a Good Time to Be Charitable?

It is always a good time to be charitable, if the Islamic philosophy of donations being a loan unto God, which Allah will return to you in this worldly life and/or in the afterlife with a manifold increase, is to be believed.

Perhaps a more succinct understanding of knowing ‘when’ to be charitable is to donate when you are feeling stingy and yearning to become wealthy and hoping for a long life. Greed and Man’s pursuit of wealth and yearning for life is never-ending. Therefore, so as long as you are alive - be charitable so as to cure your greed - and Allah will fulfil your desire for life and wealth. In essence, the pursuit of wealth is an intrinsic instinct that is forever found within Man; and being charitable when desiring wealth is the means by which Allah satisfies Mans desire for life and wealth whilst simultaneously being the mechanism to cure Mans vice which is greed.

…Which kind of charity is best? He (Muhammad s.a.w) said: ‘Giving charity when you are in good health, and feeling stingy, hoping for a long life and fearing poverty.

— SUNAN AN-NASAI, HADITH NUMBER: 2543, GRADED: SAHIH [31]

…The son of Adam grows old, but two things remain young in him: Desire for wealth, and desire for a (long) life.”

— SAHIH MUSLIM, HADITH NUMBER: [2412] 115 – (1047) [32]

14. Can Charity Be Given On Behalf Of The Deceased?

Alms can be paid on behalf of the deceased in the absence of a will, and if you believe the departed too would have donated to charity had they still been alive.

"…O Messenger of Allah, my mother died suddenly and did not leave a will. I think that if she had been able to speak, she would have given to charity. Will she have any reward if I give charity on her behalf?” He (Muhammad s.a.w) said: ‘Yes.’

— SAHIH MUSLIM, HADITH NUMBER: [2326] 51 – (1004) [33]

15. Charity Begins At Home

Donating financial aid by way of charity to your family, if they deserve financial help, is more rewarding than being charitable to those outside of kinship.[34] A reason as to ‘why’ being charitable towards one’s own family is more rewarding than being benevolent to those outside of kinship, is because; by donating to needy kinship - you strengthen family ties as well as carrying out the duty / deed of charity.[35] Thus, one donation to a needy family member is more rewarding because it is two virtues instead of one i.e. harvesting strong family bonds and donating charity.

“…The one who gives Zakat to kith and kin shall get double reward; one for fulfilling the rights of kith and kin, and the other for paying the Zakat…

— SAHIH BUKHARI, HADITH NUMBER: 1461 [36]

However, a husband is responsible for the expenses of his wife and children, therefore, him spending on his wife and children cannot be considered as Zakat in the sense of Sadaqa (charity). But, a wife spending on her husband and/or on her children will be Zakat in the sense of Sadaqa (charity) because the wife is not financially responsible for her husband and/or her children.[37] There are many more nuances and criteria’s on the eligibility and/or improper donation principles when donating Zakat to kith and kin; many such nuances of which I am unfamiliar with, therefore further research is needed on your part if you are looking to donate towards kith and kin.

The gist of the matter is - giving financial support to close relatives if they deserve financial help, has more reward than giving in charity towards others [38] because it is two virtues instead of one i.e. harvesting strong family bonds and donating charity. Notwithstanding, there are many nuances and eligibility criteria’s if donating to kith and kin for it to be considered as Zakat in the sense of a charity or tax. Allah knows best.

16. Why Are Some People Less Charitable Than Others?

Stinginess is an imperfect trait that is innate within Man; and charity by way of a financial donation is the cure to remedy ones greed. Below is the English definition of ‘stingy’:

Stingy:

1. Unwilling to spend or give

2. Insufficient or scanty

— COLLINS DICTIONARY [39]

A reason as to ‘why’ some people are more reluctant than others when it comes to being charitable, is because of a belief - that one has little or insufficient wealth to spare. This belief of one not having enough wealth to spare, is a similar conviction to that of one who is convinced that one has not enough wealth for himself. Thus the belief of not having enough wealth to spare or not having enough wealth for oneself - leads to one being stingy and unwilling to spend towards charity. In defence of charity and God, Allah does not ask Man to donate everything one has, even though philanthropy by way of donating much is commended, for being over generous is an exceptional deed and not the norm. Allah instead encourages Man to do the norm, which is to donate as much or as little as one can afford from the surplus wealth.

In the spiritual sense, a miser is described as one who wants to spend but feels suffocated at the thought of spending, therefore refrains from donating. Whereas one who is generous is also reluctant to spend, but overcomes his greed and gives into charity and in doing so enjoys a feeling of elation.

…A miser and an alms-giver is like the example of two persons wearing two iron cloaks… when the alms-giver gives in charity, the cloak becomes capacious… And when the miser wants to spend, it (the iron cloak) sticks and (its) every ring gets stuck to its place, he tries to widen it, but it does not become wide.

— SAHIH BUKHARI, HADITH NUMBER: 1443 [40]

Another reason as to ‘why’ some people are more reluctant than others when it comes to being charitable, is because of life experiences whereby ones good nature and generosity and naivety has in the past been taken advantage of by fraudsters and/or scroungers. An ill experience can cause a once openhanded individual to become more wise, cautious and/or sceptical of charities. It is well known from Hadith that a needy person and deprived person should not be returned empty handed, but the matter of professional beggars,[41] fraudsters and/or scroungers is a different matter as they should be given nothing so as to discourage beggary,[42] fraud and/or deceit.

A wise and cautious approach to charities is not unwarranted and is to be commended as it protects oneself from the harms of professional beggars, fraudsters and scroungers. However, one should be mindful of one’s own motive and intention when refraining from charities so as not to disguise greed under the guise of caution. A genuine and sincere donor who has in the past unwittingly donated to a thief / fraudster, then, the charity is still accepted as a good deed on behalf of the donor (Al-Bukhari - Hadith 1421); [43] notwithstanding, a wise person who has been defrauded should not become dispirited but should instead learn from his/her experiences so as not to be deceived twice (Al-Bukhari - Hadith 6133).[44]

In summary; some people are more reluctant than others when it comes to being charitable because of greed which is justified in the minds of the miser on the grounds of scarcity. A further group of people are dissuaded from charity due to life experiences having experienced fraud. As for the first group, charity is the means by which one can defeat and overcome greed. And as for the latter group, one should not become dispirited due to fraud but should instead seek to learn the lessons of past endeavours with the view to becoming both charitable and wise.

17. How To Defeat & Overcome Satan When Battling Greed?

At a time when one is considering to be charitable, Satan deftly calls into question our motive and intention as to ‘why’ we are seeking to waste money on charity, for Satan implies that one’s donation is non-refundable. Whereas God’s promise is that one’s donation will be refunded with a manifold increase in this life and/or in the afterlife. Satan at a time when one is considering to be charitable, plants obstacles [45] and sows seeds of reluctance into the hearts and minds of Men - such as advising one to shift the burden of charity onto others. Such excuses to abstain from charity are Satan’s attempt to dissuade Man from being charitable. Satan attempts to make Man stingy by questioning whether your alms is necessary and/or affordable. The only way to overcome one’s greed and Satan, is to recognise the devil hidden within our conscience and defy Iblis by being charitable and trusting God.

Satan makes you afraid of poverty (to stop you from spending in the way of Allah)…

— QURAN, SURAH AL-BAQARAH, 2:268,TRANSLATED BY: MUHAMMAD TAHIR-UL-QADRI [46]

18. What Is Riba (Interest/Usury) And Why Is It Outlawed?

Riba means ‘usury’ and/or ‘interest’. Below are English definitions of riba, usury and interest.

Riba:

It literally means ‘to grow; to increase, to expand.’ Technically, Riba denotes the amount that a lender receives from a borrower at a fixed rate in excess of the principal. It is of two kinds: 1. Riba Nasi’ah – taking interest on loaned money. 2. Riba Fadl – taking something of superior quality in exchange for giving less of the same kind of thing of poorer quality. See Al-Baqarah (2:275-280), Al Imran (3:130).

— SUNAN IBN MAJAH [47]

Usury:

Usury is excessive interest charges on a loan.

— REFERENCE: COLLINS DICTIONARY [48]

Interest:

Interest is the extra money that you pay if you have borrowed money, or the extra money that you receive if you have money in some types of bank account.

— REFERENCE: COLLINS DICTIONARY [49]

The matter of Riba is one of the most complex and multifaceted aspects of Islamic law;[50] its complicity even puzzled the likes of Umar (r.a.) who said:

"…And there are three things, O people, that I wish the Messenger of Allah had explained in more detail… [1] … [2] … [3] and some types of Riba"

— SAHIH MUSLIM, HADITH NUMBER: [7559] 32 – (3032) [51]

So, ‘what’ is riba and ‘why’ is it prohibited? The two types of Riba discussed in the Quran and Hadith are:

  1. Riba Nasi’ah – taking interest on loaned money.
  2. Riba Fadl – taking something of superior quality in exchange for giving less of the same kind of thing - of poorer quality.

Riba Nasi’ah is the cost of credit, and the wisdom behind prohibiting Riba Nasi’ah - was to protect debtors from the creditor; a creditor who might impose extortionate rates of interest on a desperate debtor – as well as imposing unfair penalties for late payments. In the modern world and in particular the UK, Riba Nasi’ah is regulated by the Financial Conduct Authority (FCA)[52] - who protect debtors from loan-shark criminals and greedy creditors alike, by regulating the UK financial system and imposing price caps - on the amount of interest/penalties that can be charged on a loan. The point I am making: Riba Nasi’ah is/was prohibited in order to provide debt relief, and protect debtors from creditors, creditors who could impose extortionate rates of interest and unfair penalties on desperate debtors. However, I don’t know if this Islamic prohibition on Riba Nasi’ah is lifted in a regulated market that seeks to protect debtors from creditors.

Riba Fadl is the prohibition of trading ‘higher-volume and lesser-quality’ items - in exchange for the same type of item that is of a ‘lower-volume and higher-quality’. For example, if I exchanged two sour apples in exchange for one sweet apple, that is Riba Fadl. In order to avoid riba fadl, I am to sell the two sour apples for cash - and use the proceeds to buy the one sweet apple. The wisdom behind the prohibition on Riba Fadl - is to ensure fairness in trade whereby merchants selling quality goods - are not cheated with cheap goods of the same type. Allah knows best.

In summary: riba is ‘usury’ and/or ‘interest’. There are two types of riba discussed in Islamic littrature - Riba Nasi’ah and Riba Fadl. One involves the cost of credit, and the other deals with etiquettes in trade. Riba Nasi’ah is intended to protect debtors from loan-shark criminals and greedy creditors; and Riba Fadl is intended to protect merchants from being cheated with cheap goods. Implementing the principles ‘behind the prohibition on riba’ (i.e. debt relief and fair trade) are universal values shared by humanity, but, eradicating riba is complex; because interest is a core component of the fiat currency, and, it is difficult to trade whilst avoiding Riba Fadl.

19. What Is The Relationship Between Riba (Interest/Usury) And Charity?

Lenders that trade in Riba (interest/usury), and donors that give charity, are both hoping to increase their wealth. Therefore, the relationship between riba and charity – is that they are both means by which an individual increases his/her wealth. But, God has outlawed riba and encouraged charity as a means by which an individual should increase his/her wealth.

And the money that you lend as usury so that (your wealth) may increase through mingling with other people’s money will not increase with Allah, but the money that you give as Zakat ([the obligatory Alms-due] and charity donations), seeking (solely) Allah’s pleasure—so it is they who multiply (their money with Allah) manifold.

— QURAN, SURAH AR-RUM 30:39, TRANSLATED BY: MUHAMMAD TAHIR-UL-QADRI [53]

20. How Is Zakat A Government Tax?

Zakat was declared as an obligatory duty in the second year of Hijrah in the month of Shawwal.[54] Others are of the view that Zakat became an obligatory duty in the eighth year of Hijrah.[55] Therefore, prior to the second or eighth year of Hijrah - Zakat was a voluntary duty imposed upon the Muslims. In essence Zakat in the sense of tax became an obligatory duty upon the Muslims after Muhammad (saw) had migrated from Mecca to Medina and was given authority to establish a new government (in Medina). Below is one definition of ‘tax’:

Tax:

1. A compulsory financial contribution imposed by a government to raise revenue, levied on the income or property of persons or organisations, on the production costs or sales prices of goods and services, etc.

— COLLINS DICTIONARY [56]

After prophethood whilst still living in Mecca, Muhammad (saw) spent approximately thirteen years preaching in Mecca.[57] During Muhammad (saw) early prophethood and time in Mecca, Zakat in the sense of charity was a highly praiseworthy voluntary virtue. It was during these thirteen years in Mecca did Muhammad (saw) nurture the Muslim community into being selfless.[58] But it was after the migration from Mecca and establishment of governance in Medina, did this altruistic attitude of charity and pillar of Islam (Zakat) find its way into law. In summary, Muhammad (saw) after migrating from Mecca to Medina was given authority to govern, and as governor of Medina did the Prophet (saw) decree on behalf of God - that Zakat is to become a compulsory tax levied upon the Muslims.

21. Who Is Eligible / Liable To Pay The Zakat Tax?

Prior to ascertaining whether one is financially obliged to pay the Zakat Tax; the following criteria’s must first be met:

  1. The applicant must be Muslim,[59]
  2. The applicant must be free from slavery,[60]
  3. The applicant must be in control of his/her own wealth.[61]

Additionally, the Hanafi school of Sunni jurisprudence further stipulates that the following two criteria’s must also be met:

  1. The applicant must be sane,[62]
  2. The applicant must be an adult, whereby adulthood is defined as one who has reached puberty.[63]

If the above criteria’s are met, then, an assessment is made on the value of one’s wealth. And if the applicant’s wealth or assets equal or exceed the minimum Zakat tax-thresholds illustrated below, then, the applicant is eligible / liable to pay the Zakat Tax.

zakat-the-third-pillar-of-islam-charity-and-tax

In summary, in order to ascertain whether one is eligible / liable to pay the Zakat Tax; the applicant must first satisfy the prerequisite criteria’s such as being a Muslim etc. If the prerequisite conditions such as being a Muslim etc. is met, then, an assessment is made on the value of one’s wealth or assets; and if ones assets or wealth - equals or exceeds the minimum Zakat tax-threshold such as 85g of gold or 5 camels etc., then one is eligible / liable to pay the Zakat Tax.

22. How Much Zakat Tax Should You Pay?

If you are eligible / liable to pay the Zakat tax, then, the amount of Zakat tax to be paid is dependent on a number of factors - such as the type of asset and the method of production. Below are the minimum Zakat amounts.

zakat-the-third-pillar-of-islam-charity-and-tax

23. What Is Money?

Pieces of paper labelled £10, $10 or €10 are born of the same material as newspapers, magazines and envelopes, yet, one will enable its bearer to command some measure of food, drink, clothing etc. whilst the other can be used to light a campfire. What is the difference between money in comparison to ordinary paper? The easy answer, and the right one, is that modern money is a social contrivance. People accept money as such because they know that others will. This common knowledge makes pieces of paper labelled £10, $10 or €10 valuable because everyone thinks they are, and everyone thinks they are because in his or her experience - money has always been accepted in exchange for goods, assets or services.[66]

zakat-the-third-pillar-of-islam-charity-and-tax

24. What Would Happen In A World Without Paper Money?

Without paper money, people could only barter. For example, I might offer to repair my neighbour’s car, and my neighbour in return may offer to babysit for a few hours. This is barter. However, it is hard to imagine barter - working on different scales. For example, what would happen if I wanted a loaf of bread from the bakery, and all I had to trade was shoes, but the baker in exchange for his bread wanted apples instead of shoes?

Barter depends on the ‘double coincidence of wants’,[67] this is to say, not only must the baker have the bread I want, but I also must have the apples he wants. Paper money solves all these problems and makes it easy to trade. With currency, there is no need to find a baker who wants my shoes in exchange for his bread; I simply pay the baker for his bread with the paper money I have, and the baker can then take that money and buy the apples he wants from someone else.

25. The Development Of Paper Money – Representative Money

The first use of paper money occurred in China more than 1,000 years ago. But, by the late 18th and 19th centuries paper money and banknotes had spread to other parts of the world.[68] During the 18th and 19th Centuries - paper money began as representative money; this is to say that the paper money could at any time be exchanged for gold or silver at local banks. Governments therefore kept vast supplies of gold and silver at banks. However, in the 1930’s, governments stopped converting paper money into silver or gold [69] and instead moved towards the fiat system of today.

26. What Was Commodity Money And What Is Fiat Money?

Fiat money is what we use today, whereas commodity money is how our ancestors traded. Commodity money consisted of objects that had value in and of themselves and could also be used as money. [70] For example; commodities such as salt, cattle, gold and silver have all been used in the past as money. Commodity money also had other uses, if not used as money. For example: salt could preserve food, sheep could be slaughtered for food, and gold could be melted into jewellery. In other words, commodities are objects that had value in and of itself and was used as money in trade.

Today we use fiat money made of paper, which is the opposite of commodity money.[71] This is to say, the value of the money today is not determined by the commodity, because the commodity of today’s money is paper, and the paper that the money is printed on is worthless. Therefore, the value of the note is not determined by the commodity, which is merely paper, but by the label printed on the money i.e. £10, $10 or €10.

27. How Was Commodity Money Valued?

The value of commodity money such as gold, silver, grains, camels etc. is determined by its price, and the price is determined by its market value – and the market value of commodities is determined by supply and demand. For example; the world has a finite amount of gold and silver (supply), and if more people wanted gold or silver (high demand), then, the market value of gold and silver increases in value as people are willing to pay higher prices. However, the opposite is also true, and if less people wanted gold or silver (low demand), then, the market value of gold and silver decreases in value due to people unwilling to pay higher prices. In essence, the value of commodity money such as gold or silver is/was determined by the prices that people are/were willing to pay.

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28. How Is Fiat Money Valued?

Paper currency in the fiat system of today has value because a government decrees it to be legal tender that can be used to pay debts and buy goods. This government assurance generates confidence amongst people that leads to trust and usage of a currency as a means of trade. Once a currency is established within a country, money remains scarce and in limited supply, and therefore valuable due to limits set by the central bank in terms of how much of a particular currency (money) is in circulation thus available to the world. This control of money by central banks is essential for a fiat system to work.[72] Too much money in circulation leads to higher prices for goods and services, and the currency itself becomes less valuable. Or, not enough money in circulation within a country leads to poverty and unemployment. Therefore, in today’s fiat system, the role of a central bank is pivotal to ensuring prosperity, growth and a stable economy within a country.

Essentially, within the fiat system of today, it is markets and central banks that decide and set the value and relative worth of the paper (currency); and economists base their valuation of currency on the perception of how a particular country is governing itself whilst taking into consideration the current state of the economy[73] In essence, if a country has good leadership and governance with a strong economy, then, the paper money / currency of that country is perceived (by economists) to be more valuable than a country that has poor governance coupled with a weak economy.

29. Understanding Commodity Money In Early Muslim Society

In ancient times the Zakat tax-threshold on money (i.e. gold and silver coins) was twenty dinars (20 gold coins) which was the equivalent of two-hundred dirhams (200 silver coins). Therefore, if you had twenty gold coins or two-hundred silver coins, then, you were eligible / liable to pay the Zakat tax because twenty gold coins and two-hundred silver coins was the Zakat tax threshold and equated to the same value.

…Malik said, “The agreed sunna with us is that zakat has to be paid on twenty dinars (of gold coin) in the same way as it has to be paid on two hundred dirhams (of silver).”…

— AL-MUWATTA OF IMAM MALIK, HADITH NUMBER: 17.2.7 [74]

The early Muslims and the ancient world in general, traded with gold and silver coins. This is to say, the early Muslims bought and sold goods and services with money that was in the form of gold and silver coins. Gold and silver coins was the money and currency of the ancient world; whereby a dinar was a gold coin, and a dirham was a silver coin.

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30. What Was The Purchasing Power Of A Zakat Tax Payer In Early Muslim Society?

To know the purchasing power of a currency, enables us today to get a feel of measure - on the financial worth of money in terms of how much money was needed to buy essential goods and services during the early Islamic period. And to know the purchasing power of a Zakat tax payer during the early Islamic period, enables us to quantify the value of wealth in terms of how rich were those deemed liable to pay Zakat in the early Islamic period. To know ‘how much money was needed to buy essential goods & services’ and ‘how rich were those deemed liable to pay Zakat’ in the early Islamic period; enables modern equivalents to be drawn as well as garnering a better understanding of past and present economics.

Purchasing Power:

1. The purchasing power of a currency is the amount of goods or services that you can buy with it.

2. The purchasing power of a person or group of people is the amount of goods or services that they can afford to buy.

— REFERENCE: COLLINS DICTIONARY [76]

To put the Zakat tax threshold of 20 dinar gold coins or 200 dirham silver coins into perspective in terms of the ancient purchasing power: one must become acquainted with the daily income of a household during the early Islamic period as well as becoming aware of everyday prices. Table 3 below is the annual salaries during the early Islamic period - compared to the price of living:

zakat-the-third-pillar-of-islam-charity-and-tax

Figure 1 below is the relationship between the average annual salaries and minimum cost of goods & services during the early Islamic period - depicted in both Dirhams and Dinars:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 3 and Figure 1 above illustrates - that during the early Islamic period (700’s A.D):

  • The minimum annual income of a household was 300 Dirhams / 30 Dinars.
  • On average, a worker would earn 1 Dirham / 0.1 Dinar per day. [79]
  • The daily wages of a worker was equal to 1kg of fresh dates i.e. 1 dirham / 0.100 Dinar.
  • The minimum price of one shirt was 4 Dirhams / 0.4 Dinars, therefore, one could only buy a shirt after four days of work.
  • The dowry for marrying a spouse was approximately one year’s income.
  • A gram of gold cost 2.35 Dirhams / 0.235 Dinar
  • A gram of silver cost 0.31 Dirham / 0.031 Dinar

Yet, in light of the costs, the economic welfare of the Muslims in Medina eventually reached such a status that the population could pay not only these sums, but in addition save 200 Dirhams / 20 Dinars on average per annum [80] so as to pay the Zakat tax.

31. Who Was Considered Financially Rich In Early Muslim Society?

Another way of understanding the Zakat tax thresholds in historical terms, is that those eligible / liable to pay the Zakat tax were considered to be wealthy. The reason we know that those eligible / liable to pay the Zakat tax in ancient times were considered to be wealthy, is because the Zakat tax is levied only on those that are deemed prosperous. Therefore, in 700A.D during the lifetime of the early Muslims, a prosperous individual was one who had amassed a minimum of 20 gold Dinar coins or 200 silver Dirham coins as this was the threshold on which Zakat tax was due. Anyone with such wealth was considered to be rich, thus eligible / liable to pay the Zakat tax because only the rich are required to pay Zakat for the benefit of the poor, etc.

…”I ask you by Allah. Has Allah ordered you to take Zakat from our rich people and distribute it amongst our poor people?” The Prophet (s.a.w) replied, “By Allah, yes.”…

— SAHIH BUKHARI, HADITH NUMBER: 63 [81]

32. How Much Zakat Tax Did The Early Muslims Pay?

In order to ascertain ‘how much zakat tax the early Muslims paid’, one must first convert the commodities (on which zakat was due) into currency; the currency being Dirhams & Dinars. Table 4 below is a conversion - of commodities (on which zakat was due) into currency – i.e. Dirham & Dinar.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 4 above illustrates:

  • If one had Gold or Silver up to the value of 200 Dirhams / 20 Dinars; then, Zakat tax was applicable.
  • If one had Sheep up to the value of 400 Dirhams / 40 Dinars; then, Zakat tax was applicable.
  • If one had Camels up to the value of 500 Dirhams / 50 Dinars; then, Zakat tax was applicable.
  • If one had Food Grains & Fruit up to the value of 673.5 Dirhams / 67.35 Dinars; then, Zakat tax was applicable.

Table 5 below depicts the amount of Zakat tax due in relation to the minimum value of commodities and assets upon which Zakat tax was payable during the early Islamic period [700’s A.D].

zakat-the-third-pillar-of-islam-charity-and-tax

Below is a graphical depiction of the amount of Zakat tax due in relation to the minimum value of commodities and assets upon which Zakat tax was payable during the early Islamic period [700’s A.D].

zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax

Table 5 along with Figure 2 and Figure 3 above summarises that the early Muslims paid the following amounts of Zakat tax:

  • If one had Camels up to the value of 500 Dirhams / 50 Dinars, then, Zakat tax was applicable at a rate of 2%; which equated to 10 Dirhams / 1 Dinar.
  • If one had Sheep up to the value of 400 Dirhams / 40 Dinars, then, Zakat tax was applicable at a rate of 2.5%; which equated to 10 Dirhams / 1 Dinar.
  • If one had Gold or Silver up to the value of 200 Dirhams / 20 Dinars, then, Zakat tax was applicable at a rate of 2.5%; which equated to 5 Dirhams / 0.5 Dinars.
  • If one had Food Grains & Fruit up to the value of 673.5 Dirhams / 67.35 Dinars, then, Zakat tax was applicable at a rate of between 5% - 20%; which equated to 33.68 - 134.70 Dirhams / 3.37 - 13.47 Dinars.

In conclusion: a form of cash in the 7th Century was Silver (Dirhams) and Gold (Dinar) coins. The above information shows that during the early Islamic period (700’s A.D) Zakat was payable at a rate of 2.5% on the cash savings of individuals who had amassed 200 Dirhams or 20 Dinars. Therefore, the Zakat tax payment on 200 Dirhams and 20 Dinars was 5 Dirhams or 0.5 Dinars.

The most common business in Arabia during the 7th Century was farming; thus livestock and agriculture was prevalent; hence, Zakat tax was payable on livestock and agricultural produce. The business rate of Zakat tax on farming was between 2% - 20% on businesses that had amassed between 400 – 673.5 Dirhams or 40 – 67.35 Dinars. Of particular note is the Zakat tax on camels which was at the lowest rate of 2%; from a government perspective this implies that camel farmers were treated favourably above others and thus encouraged to farm. A reason as to ‘why’ camel farmers were treated favourably above others, was possibly due to the highly valuable nature of camels to the Islamic government - governing from a 7th Century dessert. In the dessert the Arabs would rely heavily upon camels at times of war and for everyday transportation needs; thus, a low rate of 2% Zakat tax for camel farmers was both favourable and incentivised so as to encourage camel farming.

The highest rate of Zakat tax was between 5% - 20% and levied upon farmers harvesting - food grains and fruit. From a government perspective, this implies that food grains and fruit was a highly profitable business that could withstand a high tax demand and still remain lucrative to farmers. The high tax demand on food grains and fruit also implies that the government sought to profit and share a large proportion [5% - 20%] of crops amongst the inhabitants.

I have purposely excluded the Zakat tax on cattle/cows because the figures from my research were inconclusive. In summary; Zakat tax was payable at a rate of 2.5% on the cash savings of individuals that had amassed 200 Dirhams or the equivalent 20 Dinars. And Zakat was payable at a rate of between 2% - 20% on businesses that had amassed between 400 - 673.5 Dirhams or the equivalent 40 - 67.35 Dinars.

33. Converting Early Muslim Zakat Tax Payments Into Modern Currency

In the 7th Century, the Arabs traded with commodity money such as Silver and Gold in the form of coins; as well as trading with other forms of commodities such as livestock and crops. In essence, the money of the ancient world was in the form of commodities (i.e. gold, silver, livestock and crops), whereas today, cash is in the form of paper banknotes. The early Muslims paid their Zakat tax with commodity money, but in order to appreciate and understand the value of 7th Century commodity money in today’s world, commodity money needs to be converted into modern currency.

Below is the metric quantity and modern currency equivalent of gold, silver, livestock and crops upon which Zakat tax was payable during the early Islamic period [700’s A.D]. Please note that the Zakat tax figures below are based on the minimum quantities of the early Islamic period for illustrative purposes only. Therefore, should one wish to calculate their own Zakat tax payments in the modern era (if exceeding the minimum quantities), then, an accountant that is well versed in Zakat tax studies should be consulted.

zakat-the-third-pillar-of-islam-charity-and-tax

Below is a depiction of the min. Zakat tax quantities converted into US$ [2016 A.D].

zakat-the-third-pillar-of-islam-charity-and-tax

Table 6 along with Figure 4 above summarises and illustrates the relationship between the value of assets on which Zakat is due, and the amount of Zakat tax to be paid in the modern era [2016 A.D]. In essense:

  • If one farms sheep up to the value of $6,087.60, then, Zakat tax is applicable at a rate of 2.5% or the cost of 1 sheep currently valued at $152.19.
  • If one farms camels up to the value of $4,600.00, then, Zakat tax is applicable at a rate of 2% or the cost of 1 sheep currently valued at $152.19.
  • If one farms agricultural produce [i.e. food grains and fruit etc.] up to the value of $4,485.51, then, Zakat tax is applicable at a rate of between 5% - 20% which equates to within $224.28 - $897.10.
  • If one has gold, silver or cash between the values of $422.40 - $3,686.45, then, Zakat tax is applicable at a rate of 2.5% which equates to within $10.56 - $92.16.

34. Comparing The Value Of Current And Early Islamic Commodities On Which Zakat Tax Is Due

Below is a depiction of the value of current and early Islamic commodities on which Zakat tax is due.

zakat-the-third-pillar-of-islam-charity-and-tax

The above information shows that during the early Islamic period (700’s A.D) the price of 673.5kg of food grains and fruit was dearer than 40 sheep and 5 camels; however, in 2016A.D change has occurred whereby the value of 40 sheep has exceeded the value 673.5kg of food grains and fruit and 5 Camels. The data also illustrates that collectively the value of 673.5kg of food grains and fruit, 40 sheep, 5 camels and 85g of gold in the 21st Century has kept pace with the cost of living, and 21st Century prices for such commodities is still relative to the Dinar / Dirham prices of the 7th Century.

However, of particular note is the price of 640g of silver in the 21st Century which has been unable to keep pace with the cost of living; whereas in the 7th Century - 640g of silver was the equivalent of 85g of gold which could purchase enough land to build a mosque in Medina.[89] In 2016 A.D, the price of 640g of silver has considerably devalued in comparison to its 7th Century value - thus 640g of silver in 2016 A.D is worth a paltry $422.40. Therefore possessing 640g of silver (valued at $422.40) in 2016 A.D is no longer an indication of being financially wealthy in the developed world. The value of 640g of silver is significant for Zakat tax purposes because a principle of the Zakat tax is that it is a levy to be paid by the rich,[90] but in 2016 A.D to have 640g of silver valued at $422.40 is no longer an indication of being financially rich in the developed world, whereas in 7th Century Arabia - possessing 640g of silver was considered wealthy.

In summary, the Zakat tax quantities of 673.5kg of food grains and fruit, 40 sheep, 5 camels and 85g of gold remains a good measure of wealth in the 21st Century; whereas the value of 640g of silver is no longer a measure of being wealthy. In essence, an individual with a minimum savings of $3,686.45 in 2016A.D, based on the 2016A.D value of 85g of gold, is a relatively wealthy individual in the world thus liable to pay the Zakat tax of $92.16. And businesses with a stock value of between $4,485.51 - $6,087.60 (in 2016A.D), based on the value of the prevalent farming trade of 7th Century Arabia, is a wealthy business in 2016A.D thus liable to pay the Zakat tax of between $152.19 - $897.10.

35. Extrapolating The Early Islamic Principles Of Zakat Tax Into The Modern Era

There are potentially three principles from the early Islamic period that can be extended into the modern era; and each principal has both pros and con’s and challenges in the modern era. Below is the list of the three principles.

zakat-the-third-pillar-of-islam-charity-and-tax

36. Principle One: Zakat Is A Tax Paid By The Rich

Zakat is a tax paid by the rich, and one beneficiary of this levy is the poor. [91] An advantage of the annual Zakat tax levied upon the rich, for the benefit of the poor, is that such a tax – spreads and moves a nation or community’s wealth from the upper echelons of financial might, and places wealth into the hands of those that have not enough. This sharing and spreading of wealth seeks to garner societal harmony and prosperity and avert anarchy.

History is testimony - that if the poor in society grow in number, and wealth is disproportionately distributed into the arms of the rich at the expense of the poor, then, discontentment festers amongst the poor - leading to a potential revolt with disastrous consequences for the ruling elite. Therefore, a universal objective of every noble government is to attend to the needs of the poor - as far as is financially feasible; and attempt to narrow the gap between the rich and the poor to a level that is equitable. Zakat tax is one such strategy that seeks to narrow the gap between the rich and the poor by spreading and sharing wealth.

37. Who Is Financially Rich & Who Is Financially Poor During The Early Islamic Period?

In the early Islamic period [700’s A.D] only wealthy individuals and businesses were liable to pay the Zakat tax and one beneficiary of this levy was the destitute.[92] As only the wealthy were liable to pay the Zakat tax, we can deduce that during the early Islamic period [700’s A.D] a wealthy individual was one who had amassed a minimum savings of 200 Dirhams / 20 Dinars because these were the figures upon which the privileged paid their annual due.[93] And a poor individual was one who had wealth of less than 200 Dirhams / 20 Dinars.

38. Who Is Financially Rich & Who Is Financially Poor In The Modern Era [2016 A.D]?

In the modern era, the question of who is financially rich or poor is dependent on where you live and the country you are in. For example, someone living in Pakistan with savings of US$700 is considered relatively rich in Pakistan, because, in Pakistan US$700 is the average individual savings[94] (excluding debt). Thus, anyone with less than US$700 of savings in Pakistan is considered poor. However, that same Pakistani with US$700 of savings would be considered poor in Qatar, because in Qatar, the average savings is US$62,655[95] (excluding debt).

In essence, the question of ‘who is financially rich or poor in the modern era’ is dependent on where you live and the country you are in. And a reason as to ‘why’ wealth differs from country-to-country is because of the differing relationship between salaries, debt and cost of living that impacts your savings within each country.

39. How Much Zakat Tax (Excluding Debt) Would Rich Individuals Within Each Muslim Country Pay?

As mentioned previously, the question of who is financially rich or poor is dependent on where you live and the country you are in. For example, a poor person in Britain living in social housing may be considered poor in England, but that same individual would be considered rich in Afghanistan. In essense, wealth is relative to the surroundings you are in, whereby a poor person in one country could be considered rich in another due to the differing relationships between salaries, debt and cost of living that impacts your savings within each country.

Therefore, Figure 6 below is a graphical depiction of Table 8, illustrating the average individual savings of citizens – within Muslim countries on which the 2.5% zakat tax is due. The calculation of average savings (on which the 2.5% Zakat tax is due) has been calculated as:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 8 and Figure 6 below illustrates:

  • The average savings of citizens in the Muslim world (excluding debt) is US$4,439
  • The average Zakat tax payment (excluding debt) for citizens in the Muslim world is US$111
  • The highest Zakat tax payment for citizens in the Muslim world is in Qatar - who on average have a cash saving of US$62,655; thus pay US$1,566.38 annually in Zakat tax.
  • The lowest Zakat tax payment for citizens in the Muslim world is in Libya - who have a deficit cash savings of -$2,487; thus pay -$62.17 in Zakat tax. In other words, Libyans are unable to pay Zakat tax because they have no cash savings.

In summary: the amount of Zakat tax (excluding debt) that rich individuals within each Muslim country shall pay varies depending on where you live; because wealth is a differing relationship between salaries, debt and cost of living that impacts your savings within each country. In the Muslim world, the average savings of citizens ranges between -$2,487 to US$62,655; and Zakat tax ranges between [minus] -$62.17 to US$1,566.38. The average savings of citizens in the Muslim world (excluding debt) is US$4,439; and the average Zakat tax payment for citizens in the Muslim world (excluding debt) is US$111.

zakat-the-third-pillar-of-islam-charity-and-tax

40. How Does the Wealth (Excl. Debt) Of Citizens in The Muslim World Compare To Developed Nations

The major industrial nations of the world are Canada, France, Germany, Italy, Japan, United Kingdom and United States. These seven nations are commonly known as the Group of 7 (G7).[98] Figure 7 below is a graphical depiction of Table 9, illustrating the average savings and subsequent Zakat payments of citizens living within the G7 in contrast to that of the Muslim world (OIC).

zakat-the-third-pillar-of-islam-charity-and-tax

Table 9 and Figure 7 above illustrates:

  • The average savings of citizens in the Muslim world (excluding debt) is US$4,439
  • The average Zakat tax payment (excluding debt) for citizens in the Muslim world is US$111
  • The average savings of citizens within the G7 (excluding debt) is US$9,054
  • The average Zakat tax payment (excluding debt) for citizens living in the G7 group of nations is US$226

In summary: the average savings (excluding debt) of rich individuals within the Muslim world is US$4,439; in contrast, the average savings (excluding debt) of rich individuals within the G7 is US$9,054. Thus, citizens of the major industrial nations of the world that form part of the G7, are on average, almost twice as rich as citizens of the Muslim world. Subsequently, the average Zakat tax that rich individuals of the Muslim world pay is US$111; in contrast, the average Zakat tax that rich individuals within the G7 pay is US$226. Thus, citizens of the major industrial nations of the world that form part of the G7, pay on average, almost twice as much Zakat in comparison to the rich citizens of the Muslim world that form part of the OIC - because citizens living within the G7 are on average, almost twice as rich in comparison to citizens of the OIC.

41. How Much Zakat Tax (Minus Debt) Would Rich Individuals Within Each Muslim Country Pay?

Figure 8 below is a graphical depiction of Table 10, illustrating the average individual savings, minus debt, of citizens - within Muslim countries on which the 2.5% zakat tax is due. The calculation of average savings, minus debt (on which the 2.5% Zakat tax is due), has been calculated as:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 10 and Figure 8 below illustrates:

The average savings of citizens in the Muslim world (minus debt) is US$703

  • The average Zakat tax payment (minus debt) for citizens in the Muslim world is US$18
  • The highest Zakat tax payment for citizens in the Muslim world (minus debt) is in Brunei-Darussalam - who on average have a cash saving of US$34,146; thus pay US$853.64 annually in Zakat tax.
  • The lowest Zakat tax payment for citizens in the Muslim world (minus debt) is in the United Arab Emirates - who have a deficit cash savings of -$13,770; thus pay -$344.25 in Zakat tax. In other words, Emirati’s are unable to pay Zakat tax because they have no cash savings once debt is taken into account.

In summary: the amount of Zakat tax (minus debt) that rich individuals within each Muslim country shall pay varies depending on where you live; because wealth is a differing relationship between salaries, debt and cost of living that impacts your savings within each country. In the Muslim world, the average savings of citizens (minus debt) ranges between -$13,770 to US$34,146; and Zakat tax ranges between -$344.25 to US$853.64. The average savings of citizens in the Muslim world (minus debt) is US$703; and the average Zakat tax payment for citizens in the Muslim world (minus debt) is US$18.

zakat-the-third-pillar-of-islam-charity-and-tax

42. How Does the Wealth (Minus Debt) Of Citizens in The Muslim World Compare To Developed Nations

Figure 9 below is a graphical depiction of Table 11, illustrating the average savings, minus debt, and subsequent Zakat payments of citizens living within the G7 in contrast to that of the Muslim world (OIC).

zakat-the-third-pillar-of-islam-charity-and-tax

Table 11 and Figure 9 above illustrates:

  • The average savings of citizens in the Muslim world (minus debt) is US$703
  • The average Zakat tax payment (minus debt) for citizens in the Muslim world is US$18
  • The average savings of citizens within the G7 (minus debt) is -$53,522
  • The average Zakat tax payment (minus debt) for citizens living in the G7 group of nations is -$1,338

In summary: the average savings (minus debt) of rich individuals within the Muslim world is US$703; in contrast, the average savings (minus debt) of rich individuals within the G7 is -$53,522. Thus, rich citizens of the major industrial nations of the world that form part of the G7, are on average, in considerabe debt – in comparison to that of the rich citizens of the Muslim world. Subsequently, the average Zakat tax that rich individuals of the G7 shall pay is -$1,338; in contrast, the average Zakat tax that rich individuals within the Muslim World shall pay is US$18. Thus, citizens of the major industrial nations of the world that form part of the G7, are unable to pay Zakat Tax once debt is calculated, whereas on average, rich citizens of the Muslim world that form part of the OIC are able to pay Zakat once debt is deducted.

43. Comparing Zakat Tax Of Rich Individuals Within Muslim Countries – Including & Excluding Debt

Figure 10 below is a graphical depiction of Table 12; comparing the average Zakat Tax of rich individuals within Muslim countries - whilst illustrating the effect that debt calculation has on calculating the Zakat Tax.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 12 and Figure 10 above illustrates:

  • The average Zakat tax payment (minus debt) for citizens in the Muslim world is US$18
  • The average Zakat tax payment (excluding debt) for citizens in the Muslim world is US$111

In summary: the average Zakat tax payment (minus debt) of rich individuals within the Muslim world is US$18; in contrast, the average Zakat tax payment (excluding debt) of rich individuals within the Muslim world is US$111. Thus, rich individuals within the Muslim world, on average, shall pay approximately 6x more/less tax if they include/exclude debt.

44. Comparing The Zakat Tax Of Rich Citizens Of Developed Nations – Including & Excluding Debt

Figure 11 below is a graphical depiction of Table 13; comparing the average Zakat Tax of rich citizens living within the G7 - whilst illustrating the effect that debt calculation has on calculating the Zakat Tax.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 13 and Figure 11 above illustrates:

  • The average Zakat tax payment (minus debt) for citizens living within the G7 is -$1,338
  • The average Zakat tax payment (excluding debt) for citizens living within the G7 is US$226

In summary: the average Zakat tax payment (excluding debt) of rich individuals within the G7 group of nations is US$226; in contrast, the average Zakat tax payment (minus debt) of rich individuals within G7 group of nations is -$1,338.00. Thus, rich individuals within the G7 group of nations, on average, are ineligible to pay the Zakat tax if debt is deducted from savings. Therefore, should rich citizens of the major industrial nations desire to pay Zakat; then, a pragmatic approach to debt is needed; whereby long-term debt (such as mortgages, student loans etc.) is identified and not included as part of debt deductions – otherwise, rich citizens of the major industrial nations will not be liable to pay the Zakat tax because their debts outweigh their savings.

45. Comparing The Financially Rich Of The Early Islamic Period With Wealthy Citizens in 2017 A.D

As stated previously, in the early Islamic period [700’s A.D] only wealthy individuals and businesses were eligible to pay the Zakat tax.[109] As only the wealthy were eligible to pay the Zakat tax, we can deduce that during the early Islamic period [700’s A.D] - a wealthy individual was one who had amassed a minimum savings of 200 Dirhams / 20 Dinars, because these were the figures upon which the privileged paid their annual due.[110]

In order to compare the wealth of eligible Zakat payers of the Early Islamic Period [700’s A.D.], with the eligible Zakat payers of the modern era [2016 A.D.]; we need to understand and extrapolate the relationship between salaries and savings of yesteryear in comparison to today. Below is a table depicting the average salaries of the Early Islamic Period [700’s A.D.], and comparing it to the Zakat threshold (or savings) upon which the early Muslims were liable to pay Zakat.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 14 above illustrates:

  • The average salary during the early Islamic period [700’s A.D.] was between 300 - 400 Dirhams / 30 - 40 Dinars.
  • The Zakat threshold (or savings) upon which Zakat tax is due was 200 Dirham / 20 Dinar.
  • The relationship between salary and savings was between 50% - 66%.

In essence: during the early Islamic period [700’s A.D.] the average national salary was between 300 - 400 Dirhams or 30 - 40 Dinars; and those that had savings of 200 Dirham or 20 Dinar were eligible to pay Zakat tax on their savings. In other words, those that could save between 50% - 66% of their average national salary, were eligible to pay Zakat tax.

In the modern era [2017 A.D.] there are very few nations in the world that can boast a savings of between 50% - 66% of their average national annual salary. And perhaps even during the early Islamic period [700’s A.D.] – it was only the few that could afford to pay the Zakat tax due to the extreme levels of wealth that one needed to have accumulated in order to have been eligible to pay Zakat (in the sense of tax).

Figure 12 below is a graphical depiction of Table 15; illustrating the relationship between salaries and savings [as % of Salary] of the Muslim world in the modern era [2017 A.D.].

Table 15 and Figure 12 below illustrates:

  • The average savings as % of salary in the Muslim world is 19%. In other words, on average, citizens in the Muslim world save 19% of their national salary.
  • The only nation in the Muslim world that saves between 50% - 66% of their salary is Suriname; who on average save 55% of their annual salary.

In summary: during the early Islamic period [700’s A.D.] - those that had savings of between 50% - 66% of their national salary were eligible to pay Zakat tax. In the modern era [2017 A.D.] – the average savings [% of salary] in the Muslim world is 19%; and Suriname is the only nation in the Muslim world at 55% that can boast savings of between 50% - 66% of their national salary. Therefore, if we were to extrapolate the early Islamic Zakat tax eligibility on the wealthy today, based on the amount of savings one has accumulated in relation to his/her salary, then, there are very few people in the Muslim world (par Suriname) that can pay Zakat tax, because only a few can boast savings of between 50% - 66% of their national salary.

zakat-the-third-pillar-of-islam-charity-and-tax

46. Pros & Cons Of Determining Your Zakat Liability - If Savings Equal 50% Of Average Annual Salary

The advantages of determining your Zakat liability - only if you have savings that equals or exceeds 50% of the average annual salary, is that via this calculation one remains true to a principal of the Zakat tax, in that Zakat tax is a levy payable by those that are deemed wealthy.[114] Because in any country, one who can live and save 50% of the average annual salary, is considerably wealthy within that society. For example, the average annual salary in the US in 2017 is $57,300,[115] and anyone with 50% of $57,300 (which is $28,650) available to them as savings is relatively wealthy.

A further advantage of determining your Zakat liability - only if you have savings that equal or exceed 50% of the average annual salary, is that this approach replicates the economic situation of the early Islamic period whom taxed those that held 20 Gold Dinars or 200 Silver Dirhams in savings, and whose average salary was between 30 – 40 Gold Dinars or 300 – 400 Silver Dirhams;[116] in essence the Zakat tax threshold during the early Islamic period was also approximately 50% of one’s annual salary.

The disadvantage of determining your Zakat liability – via this method is that many will be unable to participate in the giving of Zakat tax, because, to have 50% of the average annual salary as savings is a substantial amount of savings. According to the Central Intelligence Agency (CIA), the only Muslim nation that saves above 50% or above of its Gross national disposable income is Suriname, who’s Gross National Savings is 57% and is the highest rate of savings in the world.[117] In other words, if Zakat were to be implemented today at a national level, and the Zakat liability was to be pinned to your savings which had to equal or exceed 50% of the average annual salary, then, the citizens of Suriname would predominantly only pay Zakat; because Surinami’s on average have savings that equal or exceed 50% of their average annual salary.

47. Is Possessing 640 Grams Of Silver / 85 Grams of Gold Representative of Being Wealthy In 2017 A.D?

In 700A.D during the lifetime of the early Muslims, a prosperous individual was one who had amassed a minimum of 20 Gold Dinar coins or 200 Silver Dirham coins[118]. Anyone with such wealth was considered to be rich, thus eligible / liable to pay the Zakat tax.[119]

Gold and Silver are valued according to their weight; and 20 Gold Dinar’s weighed 85g, and 200 Silver Dirhams weighed 640g.[120] In the 7th Century during the lifetime of the early Muslims, 85g of Gold and 640g of Silver were of equal value.[121] However, as of 2016 A.D – 85g of Gold is valued at $3,686.45, and 640g of Silver is valued at $422.40[122] Therefore, as of 2016 A.D, 85g of Gold and 640g of Silver are not of equal value.

So the question that needs to be asked is: ‘Is possessing $422.40 or $3,686.45 still considered wealthy in 2017 A.D?’

Figure 13 below is a graphical depiction of Table 16, illustrating the average individual savings of citizens – within Muslim countries and comparing it against the value of 85g of Gold and 640g of Silver. The calculation of average savings has been calculated as follows:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 16 and Figure 13 below illustrates:

  • The average savings of citizens in the Muslim world (excluding debt) is US$4,439
  • The value of 85g of Gold is $3,686.45, and the value of 640g of Silver is $422.40
  • The citizens of 15 out of 58 Muslim Nations have on average individual savings that equals or exceeds the value of 85g of Gold [$3,686.45]
  • The citizens of 40 out of 58 Muslim Nations have on average individual savings that equals or exceeds the value of 640g of Silver [$422.40] or 85g of Gold [$3,686.45]
  • The citizens of 18 out of 58 Muslim Nations do not have average individual savings that equals nor exceeds the value of 640g of Silver [$422.40] or 85g of Gold [$3,686.45].

In summary: possessing 85g of Gold valued at $3,686.45 [2016 A.D] is still relatively wealthy in comparison to the vast majority of people within the Muslim World; because only a few citizens residing within 15 Muslim Nations have on average savings that equals or exceeds the value of 85g of Gold [$3,686.45]. Possessing 640g of Silver valued at $422.40 is also relatively wealthy if you consider the citizens of 18 Muslim Nations that on average do not have individual savings that equals or exceeds the value of 640g of Silver [$422.40].

Therefore the question of ‘Is possessing $422.40 or $3,686.45 still considered wealthy in 2017 A.D’ is relative to where you live and who you compare yourselves too.

zakat-the-third-pillar-of-islam-charity-and-tax

48. Pros & Cons of Determining Your Zakat Liability According to The Value of Silver [2017 A.D]

The advantages of determining your Zakat liability according to the value of Silver is that it is simple to calculate as it involves merely adding your savings, and if your savings exceeds the lowest common denominator of 200 Dirhams[125] (640g [126] of Silver currently valued at $422.40 [127]), then you are liable to pay the Zakat tax. A further advantage is that many Muslims will find themselves being liable to pay the Zakat tax as $422.40[128] is a relatively paltry amount in many countries. A further advantage is that Zakat in the sense of charity (Sadaqa) is a voluntary obligation upon all Muslims albeit rich or poor,[129] and by linking your savings to the lowest common denominator of silver, enables many to reach the threshold thus participate in the giving of alms by way of Zakat.

However, the disadvantage of linking your savings today to the value of Silver, is that the price of Silver has no longer kept in-line with the cost of living. Therefore, possessing 640g[130] of Silver today valued at $422.40[131] is no longer an indication of being financially wealthy; whereas during the early Islamic period – one who had 640g of Silver could purchase enough land to build a mosque[132] and was therefore a signature of wealth.

A principle of Zakat is that it is a tax to be paid by the rich, but, possessing 640g of Silver today valued at $422.40[133] is not an indication of being wealthy in many countries. Change has occurred in the value of Silver during the course of 1,400 years which has seen the price of Silver unable to keep pace with the cost of living. In essence, today 640g of Silver has no relation to the cost of goods and services whereas during the early Islamic period – 640g of Silver could acquire land to build a mosque[134] and much more.

In other words, during the early Islamic period - 200 Silver Dirham coins weighing 640g had substantial purchasing power and anyone who possessed such wealth was considered to be wealthy. But today, 200 Silver Dirham coins weighing 640g is worth a paltry $422.40. The point I am making is that Silver has been unable to keep pace with the cost of living, therefore 640g of Silver is no longer a benchmark to measure wealth, as it is only worth $422.40. Also, today 640g of Silver has no relation to the cost of living, thus linking your savings in modern times to the value of Silver, neglects a principle of Zakat - which is a tax to be paid by the rich.

In conclusion, the advantages of determining your Zakat liability according to the value of Silver is that it is easy to calculate and enables several Muslims to participate in the giving of alms - because the threshold of $422.40 is easily reachable for many. The disadvantage is that possessing 640g of Silver today, valued at $422.40, is no longer an indication of being wealthy in many countries; and a principle of Zakat is that it is a tax to be paid by the rich.[135]

49. Why Do Rich People & Nations Have Considerable Debt?

To the rich, debt is a part and parcel of life. The richer you are, the more debt you accumulate because banks and individuals are more likely to lend to the one who is rich; because the rich are deemed financially able to return a loan and pay a debt. In other words, banks and individuals are more likely to lend to the rich; because a lender believes/knows that a rich individual is more likely to return a loan - in comparison to the one who is poor. The reason a lender believes/knows a rich individual is more likely to return a loan, thus pay debts, is because rich folks have more surplus wealth than poor folks. Therefore, rich individuals tend to always be in debt because they are able to secure loans; in contrast to poor individuals who are unable to secure loans therefore tend not to have debt or as much debt as rich folk.

50. What Impact Does Debt Have On Zakat Payments?

If Zakat tax was to be levied on the rich after the deduction of all debt, then, on average - rich citizens of the major industrial nations would not be liable to pay the Zakat tax because their debts outweigh their savings. In contrast, rich citizens of the Muslim World, on average, would be liable to pay the Zakat Tax because their savings outweigh their debts. Thus perhaps, should rich citizens of the major industrial nations desire to pay Zakat; then a pragmatic approach to debt is needed, whereby long-term debt (such as mortgages, student loans etc.) is identified and not included as part of debt deductions – otherwise, rich citizens of the major industrial nations would not be liable to pay the Zakat tax because their debts outweigh their savings.

51. Concluding Zakat Principle One: Zakat Is A Tax Paid By The Rich

Zakat in the context of tax (as opposed to charity) is a sum paid by the rich. [136] During the early Islamic period [700’s A.D], the average annual salary was between 300 - 400 Dirhams / 30 - 40 Dinars;[137] and a rich individual was one who held a minimum savings of 200 Dirhams / 20 Dinars[138]. This implies that a rich individual during the early Islamic period was one who had savings of between 50% - 66% of the average national-annual salary.[139] This level of wealth is a considerable amount of money, and was perhaps only affordable by the middle to upper-class of society. In the modern era [2017 A.D], Surinami’s are on average the only citizens in the Muslim world that can boast savings of between 50% - 66% of their average national-annual salary.[140] Therefore, if we were to extrapolate the early Islamic Zakat tax eligibility upon the wealthy today, based on the amount of savings one has accumulated in relation to his/her salary, then, there are very few people in the Muslim world (par Suriname) that are eligible to pay Zakat tax. Hence, illustrating that Zakat was a tax in the 7th Century levied upon those that were considerably rich, and perhaps belonging to the middle to upper class of society.

Furthermore, to answer the the question of ‘are you financially rich to pay Zakat’ is to measure wealth – and the quantity of wealth that determines whether you are rich is different in each country; due to the differing relationship between salary, debt and cost of living that impacts your savings within each nation. For example, someone living in Pakistan with savings of US$700 is considered relatively rich in Pakistan, because in Pakistan, US$700 is the average individual savings[141] (excluding debt). However, that same Pakistani with US$700 of savings would be considered poor in Qatar, because in Qatar, the average savings is US$62,655[142] (excluding debt). The point being, the question of ‘are you financially rich to pay Zakat’ is a measurement of wealth that is different in each country - because of the differing relationship between salary, debt and cost of living that impacts your savings within each nation. Therefore, the savings that determines your eligibility to pay Zakat is different in each nation, because ‘the quantity of wealth that determines whether you are rich’ is relative to the country in which you are in, thus different in each nation i.e. US$62,655 of savings is rich in Qatar, and US$700 of savings is rich in Pakistan.

Furthermore, if debt was to be deducted from one’s savings as part of the annual Zakat calculations; then citizens of the Muslim World would pay on average 6x less tax.[143] Therefore, Zakat liable citizens of the Muslim World would pay on average US$18 per annum towards Zakat; as opposed to the US$111 if debt was to be disregarded.[144] In comparison, Zakat liable citizens of the G7 industrial nations would pay on average -$1,338 if debt was to deducted from one’s savings.[145] Thus illustrating, rich individuals within the G7 nations, on average, are ineligible to pay the Zakat tax if debt is deducted from savings. Therefore, a pragmatic approach to debt is needed; whereby long-term debt (such as mortgages, student loans etc.) is identified and not included as part of debt deductions when calculating the savings upon which Zakat is due – otherwise, rich citizens of the G7 are ineligible to pay Zakat because the debts (of G7 citizens on average) pushes their savings into minus. In essence, debt is a part and parcel of life to the rich - the richer you are, the more debt you accumulate. Thus, for the purposes of Zakat calculation – rich individuals of the G7 nations must distinguish and disregard long-term debts that are a part and parcel of life, whilst possibly considering only the short-term debts that are short-lived - if one is to be considered liable to pay Zakat. Otherwise, rich individuals of the G7 are on average not liable to pay Zakat because their debts outweigh their savings.

In summary: Zakat is a tax paid by those that are considerably rich,[146] perhaps only affordable by those belonging to the middle to upper class of society within each country. Therefore, the question of ‘are you financially rich to pay Zakat’ is relative to the country in which you live, thus different in each nation; due to the differing relationship between salary, debt and cost of living that impacts savings within each land. If debt is deducted from the savings upon which Zakat is calculated, then, a pragmatic approach to debt is needed whereby long-term and short-term debts are distinguished, and long-term debts are to be excluded from one’s Zakat calculation - if one is to be considered liable to pay Zakat. Otherwise, rich individuals of the G7 are on average not liable to pay Zakat because their debts outweigh their savings.

52. Principle Two: Zakat Is To Be Distributed Locally

A principle of Zakat is that it is a tax to be taken from the rich of one area, and distributed amongst the poor in the same area in which the Zakat was taken.[147] For example, if Zakat was taken from the wealthy - local inhabitants residing in Bangladesh, then, that same sum is to be distributed amongst the poor – local inhabitants residing in Bangladesh. However, under exceptional circumstances in which poverty is non-existent (within the area you are in), or, the donor desires to give Zakat to an eligible family member living abroad, or, the donor desires to give Zakat to another more worthier cause overseas, then, under such extraordinary circumstances can the Zakat tax of the rich of one land be distributed amongst the poor in another area.[148] Nonetheless, the principle of distributing - locally collected Zakat - for the benefit of local inhabitants [149] should not be downplayed.

53. Why Is Zakat To Be Distributed Locally?

There are 4 reasons (and possibly more) as to ‘why’ it is wise to collect and distribute Zakat locally.

  1. To collect and distribute Zakat locally was the explicit command of Muhammad (s).[150]
  2. It is somewhat uncomfortable (but not necessarily wrong) to tend to the destitute in distant lands, considering one has neighbours living locally that are equally needy.
  3. Collecting Zakat from the rich, locally, and distributing locally – creates a strong sense of local community; and deters the poor from festering ill-will against (local) rich folk.
  4. The rich whom pay Zakat can not feel robbed by another community; because the locally collected Zakat is to be distributed locally and tend towards ones own (local) community.

In summary, it is wise to collect and distribute Zakat locally – primarily because it was an explicit command of Muhammad (s).[151] Furthermore, it is somewhat discomforting, but not necessarily wrong, to tend to the destitute abroad – if one has neighbours with equal needs. The phrase ‘charity begins at home’ comes to mind. Also, the local distribution of Zakat creates a strong sense of local community and deters any ill-will that may be festering amongst the poor towards the rich (within one’s own locality). Lastly, the rich whom pay Zakat can not feel robbed at seeing another community benefiting from their revenue, because the locally collected funds are to be distributed locally and tend towards ones own (local) community.

54. Would distributing Zakat Locally (Or Internationally) - End poverty For All?

No. Distributing Zakat locally (or internationally) will not end poverty for all; for poverty is something that can never be entirely eradicated. However, the distribution of Zakat locally (or internationally) can ease the suffering of the poor by financing access to amenities such as clean water and food. Distributing Zakat locally or internationally can also extend the life expectancy and carreer prospects of the poor by paying for access to healthcare and education. Ultimatly, it is through financing provisions such as clean water, food, healthcare and education do some (not all) poor people pull themselves out of poverty and towards prosperity. Nonetheless, there will always be rich and poor people in every community/society/country because there will always be those who have more or less than others.

In summary: distributing Zakat locally (or internationally) will not end poverty for all because there will forever be rich and poor people in every community/society/country due to some having more or less wealth than others. However, the distribution of Zakat locally (or internationally) can ease the suffering of the poor and allow some among the poor to pull themselves out of poverty, and towards prosperity; by financing (via Zakat) access to clean water, food, healthcare and education.

55. How To Attain & Maintain Prosperity?

In order for a nation and its people to become prosperious or maintain prosperity; a government needs to develop economic policies. The objective of all economic policies is to create wealth and jobs and generate tax from the income that businesses and employment brings. In essense, the more people that work and trade, the more income tax a government collects from salaries. Therefore, the creation of wealth and jobs by which a population becomes prosperious or maintains prosperity - is in the vested interest of the State; because work leads to salaries, and salaries lead to income tax for the treasury. The availability of jobs and size of salaries is influenced by economic policies; thus, it is economic policies that ultimatly determine a nation and its peoples level of prosperity through salaries.

In order for a nation to attain / maintain prosperity via its economic policies, a government must plan ahead; plan ahead by creating, training and educating the nations workforce to do the jobs that’ll shape the future. In essense, a government needs to invest in its people so as to upskill the workforce to do the jobs of the future that are deserving of the highest salaries. Once a workforce becomes skilled and capable of manufacturing and delivering the products and services that’ll shape the future, and, citizens have government support to either set-up new businesses or avenues into highly-paid jobs; a nation and its people become prosperious. Prosperity is then maintained via continuously developing the skills needed to create the products and services that deserve the highest salaries and shape the future.

In summary, in order for a nation and its people to attain and maintain prosperity, a government needs to develop economic policies/plans that will create the products and services of the future. In order to deliver a nations economic policy/plan, a government must invest in its workforce - by steering the nation in the desired direction through education and training; so as to enable the workforce to do the jobs of the future that are deserving of the highest salaries.

56. How Much Zakat (US$) Could The Muslim World Distribute Locally - 2.5% GNS Distribution

Figure 14 below is a graphical depiction of Table 17, illustrating 2.5% of each Muslim Nations Gross National Savings. The calculation of 2.5% Gross National Savings has been calculated as follows:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 17 and Figure 14 below illustrates:

  • On average, each Muslim Nation can contribute $1.8 Billion towards Zakat and alleviating local poverty.
  • The total contribution from all Muslim Nations towards Zakat can be US$102 Billion.
  • The highest Zakat tax contribution in the Muslim World can be from Indonesia who can contribute US$25 Billion.
  • The lowest Zakat tax contribution in the Muslim World can be from Libya who can contribute -$407 Million. In essence, Libya can not contribute towards Zakat because it has no national savings.

In summary: on average, each Muslim Nation can contribute US$1.8 Billion towards Zakat, subject to a governments desire to spend 2.5% of its Gross National Savings towards alleviating poverty. Notwithstanding, this average of US$1.8 Billion is somewhat misleading and skewed because there exists a huge gap between the few economies of the rich, and the many economies of the poor; for it is only the few economies of the rich that can realistically afford to contribute US$1.8 Billion towards Zakat. Nonetheless, this average of US$1.8 Billion still stands. The total available funds - for the purpose of Zakat – should every member of the OIC contribute 2.5% of their Gross National Savings, would equate to US$102 Billion. The highest contributor would be Indonesia, and the lowest contributor would be Libya.

zakat-the-third-pillar-of-islam-charity-and-tax

57. How Much Zakat (US$) Could G7 Nations Distribute Locally - 2.5% GNS Distribution

Figure 15 below is a graphical depiction of Table 18, illustrating 2.5% of each G7 Nations Gross National Savings. The calculation of 2.5% Gross National Savings has been calculated as follows:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 18 and Figure 15 below illustrates:

  • On average, each G7 Nation can contribute US$26 Billion towards Zakat and alleviating local poverty.
  • The total contribution from all G7 Nations towards Zakat can be US$182 Billion.
  • The highest Zakat tax contribution amongst the G7 Nations can be from the United States who can contribute US$82 Billion.
  • The lowest Zakat tax contribution amongst the G7 Nations can be from the United Kingdom who can contribute US$8 Billion.

In summary: on average, each G7 Nation can contribute US$26 Billion towards Zakat, subject to a governments desire to spend 2.5% of its Gross National Savings towards alleviating poverty. The total available funds - for the purpose of Zakat – should every member of the G7 contribute 2.5% of their Gross National Savings, would equate to US$182 Billion. The highest contributor would be the United States, and the lowest contributor would be the United Kingdom.

zakat-the-third-pillar-of-islam-charity-and-tax

58. Comparison Between G7 And Muslim World – If 2.5% GNS Spent Towards Alleviating Local Poverty

Figure 16 below is a graphical depiction of Table 19, illustrating the comparison between the G7 and Muslim World – if 2.5% of Gross National Savings were to be spent towards alleviating local poverty.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 19 and Figure 16 above illustrates:

  • On average, nations of the Muslim World could contribute US$1.8 Billion - if 2.5% of Gross National Savings were to be spent towards alleviating local poverty.
  • In total, the Muslim World could contribute US$102 Billion - if 2.5% of Gross National Savings were to be spent towards alleviating local poverty.
  • On average, nations of the G7 could contribute US$26 Billion - if 2.5% of Gross National Savings were to be spent towards alleviating local poverty.
  • In total, the G7 could contribute US$182 Billion - if 2.5% of Gross National Savings were to be spent towards alleviating local poverty.

In summary: On average, nations of the Muslim World could contribute US$1.8 Billion - if 2.5% of Gross National Savings were to be spent towards alleviating local poverty; in contrast, nations of the G7 could on average spend US$26 Billion. In total, nations of the Muslim World could contribute US$102 Billion - if 2.5% of Gross National Savings were to be spent towards alleviating local poverty; in contrast, nations of the G7 could in total spend US$182 Billion.

59. How Much Zakat (US$) Would Each Citizen Below Poverty receive Locally - Muslim World GNS

Figure 17 below is a graphical depiction of Table 20, illustrating the relationship between the percentage of population below poverty, and how much Zakat (US$) each citizen below poverty would receive – if each Muslim nation distributed 2.5% of their Gross National Savings, locally. The calculation of how much Zakat (US$) each citizen below poverty would receive has been calculated as follows:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 20 and Figure 17 below illustrates:

  • On average, each citizen below poverty residing within the Muslim World would receive US$1,345
  • On average, 33% of the population residing within the Muslim World is living below the poverty line.
  • The poverty-stricken citizens of Turkmenistan would receive the highest Zakat contribution at US$44,976.33 each.
  • The poverty-stricken citizens of Libya would receive the least Zakat contribution at minus -$186.71 each.

In summary: on average, each citizen below poverty residing within the Muslim World would receive US$1,345 - if governments within the Muslim World were to share 2.5% of their Gross National Savings locally amongst their poor. Notwithstanding, this average of US$1,345 is somewhat misleading and skewed because there exists a huge gap between the few economies of the rich, and the many economies of the poor; for it is only the few economies of the rich that can realistically afford to distribute US$1,345 to each citizen below poverty. The highest recipient of government Zakat would be the poverty-stricken citizens of Turkmenistan, and the lowest recipient of government funding would be the impoverished Libyans. Furthermore, there is an obvious correlation between the number of poor people within each country, and the available funds that can be shared – whereby, the higher the rate of poverty, the lower the available funds per person. And the opposite is also true, whereby, the lower the rate of destitution, the more funds available to combat poverty. Lastly, this analysis is based on those nations that report figures, therefore, data is unavailable for some nations that consider themselves to have no poverty, or, merely do not report figures.

zakat-the-third-pillar-of-islam-charity-and-tax

59. How Much Zakat (US$) Would Each Citizen Below Poverty receive Locally - G7 GNS

Figure 18 below is a graphical depiction of Table 21, illustrating the relationship between the percentage of population below poverty, and how much Zakat (US$) each citizen below poverty would receive – if each G7 nation distributed 2.5% of their Gross National Savings, locally.

Table 21 and Figure 18 below illustrates:

  • On average, each citizen below poverty residing within the G7 would receive US$1,523
  • On average, 17% of the population residing within the G7 is living below the poverty line.
  • The poverty-stricken citizens of Canada would receive the highest Zakat contribution at US$2,442.43 each.
  • The poverty-stricken citizens of Italy would receive the least Zakat contribution at US$563.03 each.

In summary: on average, each citizen below poverty residing within the G7 would receive US$1,523 - if governments within the G7 were to share 2.5% of their Gross National Savings locally amongst their poor. The highest recipient of government Zakat would be the poverty-stricken citizens of Canada, and the lowest recipient of government funding would be the impoverished Italians. Furthermore, there is an obvious correlation between the number of poor people within each country, and the available funds that can be shared - whereby the higher the rate of poverty, the lower availability of funds per person. And the opposite is also true whereby - the lower the rate of destitution, the more funds available per person to combat poverty.

zakat-the-third-pillar-of-islam-charity-and-tax

61. Comparison Between The G7 And Muslim World – If Each Nation Distributed 2.5% Of Their GNS

Figure 19 below is a graphical depiction of Table 22, illustrating the comparison between the G7 and Muslim World – if 2.5% of Gross National Savings were to be distributed locally to citizens below poverty.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 22 and Figure 19 above illustrates:

  • On average, nations of the Muslim World could contribute US$1,345 - if 2.5% of Gross National Savings were to be distributed locally to citizens below poverty.
  • On average, 33% of the population residing within Muslim nations are below poverty.
  • On average, nations of the G7 could contribute US$1,523 - if 2.5% of Gross National Savings were to be distributed locally to citizens below poverty.
  • On average, 17% of the population residing within G7 nations are below poverty.

In summary: On average, nations of the Muslim World could contribute US$1,345 - if 2.5% of Gross National Savings were to be distributed locally to citizens below poverty; in contrast, nations of the G7 could on average distribute US$1,523. This OIC average of US$1,345 is somewhat misleading and skewed by Turkmenistan - who have extreme low levels of poverty coupled with vast wealth, thus enabling Turkmenistan to warp the figures. Nonetheless, this OIC average of US$1,345 still stands. Lastly, on average, 33% of the population residing within Muslim nations live below poverty; whereas, 17% of the population residing within G7 nations live below poverty. This indicates that on average, there is nearly twice as much poverty in the Muslim World in comparison to that of the G7.

In essence, G7 nations can on average distribute more money locally to individual citizens living below poverty, in comparison to that of the OIC. Also, there is nearly twice as much poverty in the Muslim World in comparison to that of the G7.

62. How Much Foreign Aid Do Muslim Nations Receive, In Relation To Their Gross National Savings?

The purpose of this exercise is to demonstrate the relationship between ‘foreign aid’ and ‘gross national savings’. The reason for illustrating this relationship between ‘foreign aid’ and ‘gross national savings’ - is to identify the nations that receive foreign aid that is ≥2.5% of their ‘gross national savings’; because 2.5% ‘gross national savings’ is the figure upon which nations would otherwise spend on Zakat purposes.

Figure 20 below is a graphical depiction of Table 23, illustrating the amount of forign aid each Muslim nation receives, in realtion to its ‘gross national savings’.

The calculation of ‘Foreign Aid Received in realtion to Gross National Savings’ has been calculated as follows:

zakat-the-third-pillar-of-islam-charity-and-tax

Table 23 and Figure 20 below illustrates:

  • On average, the poorest of Muslim Nations receive the equivilant of 21% of their Gross National Savings by way of Foreign Aid; so as to spend on Zakat purposes.
  • 33 out of 58 Muslim Nations receive and spend foreign aid that equals or exceeds ≥2.5% of their ‘gross national savings’.
  • On average, the poorest of Muslim Nations - each receive US$851 Million by way of Foreign Aid; so as to spend on Zakat purposes.
  • In total, the poorest of Muslim Nations received US$49 Billion by way of Foreign Aid; so as to spend on Zakat purposes.

In summary: on average, the poorest of Muslim nations receive and spend the equivalent of 21% of their Gross National Savings by way of Foreign Aid. Furthermore, 33 out of 58 Muslim Nations receive and spend foreign aid that equals or exceeds ≥2.5% of their ‘gross national savings’. This implies that many a Muslim Nations are receiving and spending Zakat funds by way of foreign aid, and in many cases, expenditure exceeds the 2.5% Zakat requirement that ought to be spent on poverty alleviation from the coffers of a nations own gross national savings. On average, the poorest of Muslim Nations - each receive US$851 Million by way of Foreign Aid; and in total the poorest of Muslim Nations received US$49 Billion in Foreign Aid.

zakat-the-third-pillar-of-islam-charity-and-tax

63. Concluding Zakat Principle Two: Zakat Is To Be Distributed Locally

A principle of Zakat is that it is a tax to be taken from the rich of one area, and distributed amongst the poor in the same area.[166] However, under exceptional circumstances in areas where poverty is non-existent, or, the donor desires to give Zakat to an eligible family member living abroad, or, the donor desires to give Zakat to another more worthier cause overseas, then, under such extraordinary circumstances can the Zakat tax of the rich of one land be distributed amongst the poor in another area.[167] Nonetheless, the principle of distributing locally collected Zakat - for the benefit of local inhabitants should not be downplayed.

The primary reason as to ‘why’ Zakat is to be collected locally, and distributed, locally; is because it was an explicit command of Muhammad (s). [168] Other reasons as to ‘why’ Zakat is to collected and distributed locally is because charity begins at home, and it is somewhat uncomfortable (without being necessarily wrong) – to tend to the destitute abroad if one has neighbours with equal needs. Also, the local distribution of Zakat creates a strong sense of local community and deters any ill-will that may be festering amongst the poor towards the rich (within one’s own locality). A final reason as to ‘why’ Zakat is to be collected locally and distributed, locally; is because the rich whom pay Zakat can not feel robbed at seeing another community benefiting from their revenue, as the locally collected funds are distributed locally and tend towards ones own (local) community.

The distribution of Zakat locally or internationally is not intended to end poverty for all, for poverty is something that can never be entirely eradicated. There will permanently be rich and poor people in every community/society/country due to there always being those who have more or less than others. However, the distribution of Zakat locally (or internationally) can ease the suffering of the poor by financing access to clean water, food, healthcare and education – means by which some (not all) among the poor can pull themselves out of poverty and towards prosperity.

Lastly, it is a governments responsibility to collect Zakat in the sense of tax, and create oppurtunities and provisions for the poor via the distribution of Zakat. There is responsibility upon Muslim governments in particular – to facilitate and distribute a minimum of 2.5% of a nation’s gross national savings towards alleviating poverty, thus fulfiling the Zakat obligation. Notwithstanding, many governments do receive foreign aid that equals or exceeds 2.5% of a nation’s gross national savings, and the disbursement of foreign aid can be considered as fulfiling the Zakat obligation.

In essence, Zakat is to be collected locally, and distributed locally because of a host of reasons that includes an explicit command of Muhammad (s)[169] Notwithstanding, under exceptional circumstances the donor can decide to donate abroad. The distribution of Zakat locally (or internationally) is intended to alleviate poverty by financing access to clean water, food, healthcare and education – means by which some (not all) among the poor can pull themselves out of poverty and towards prosperity. Governments must seek to set aside 2.5% of a nation’s gross national savings for Zakat purposes, alternatively, the disbursement of foreign aid can be considered as fulfilling the Zakat obligation - if it equals or exceeds 2.5% of a nation’s gross national savings.

64. Principle Three: Business Zakat Rates

In 700 A.D during the lifetime of the early Muslims, the most common business in Arabia was agriculture; thus, livestock and crops. Islam’s basis for calculating business Zakat is solely based on the agricultural industry. However, in the 21st Century – new business sectors have developed – sectors such as technology, construction, retail, arts etc. In order to extrapolate 7th Century wisdom relating to agricultural tax, and insert ancient brilliance holistically across new industries and sectors of the 21st Century, a number of assumptions and analogies need to be made so as to interpret agricultural policies into new business sectors.

Below are the Zakat tax amounts for livestock and crops upon which Zakat was payable during the early Islamic period [700’s A.D]. Please note that the Zakat tax figures below are based on the minimum quantities of the early Islamic period for illustrative purposes only. Therefore, should one wish to calculate their own Zakat tax payments in the modern era (if exceeding the minimum quantities), then, an accountant that is well versed in Zakat tax studies should be consulted.

zakat-the-third-pillar-of-islam-charity-and-tax

Table 24 above illustrates:

  • Crops (food grains & fruit) has three distinct tax brackets; 5%, 10% or 20%
  • Camels (livestock) has a low tax bracket of 2%
  • Sheep (livestock) has a higher tax bracket than that of Camels at 2.5%

65. Why Does Crop Farming Have Three Distinct Tax Brackets?

In 700 A.D during the lifetime of the early Muslims, crop farmers either paid 5%, 10% or 20% tax on their produce.[171] The tax bracket in which crop farmers found themselves in, was dependent on their method of irrigation relating to labour intensity. In other words, if the farming method was labour intense, then the tax was low; but if the farming method was effortless, then the tax was high.

zakat-the-third-pillar-of-islam-charity-and-tax

66. Interpolating 7th Century Agricultural Crop Tax Into 21st Century Industries

It is evident that in the 7th Century during the lifetime of the early Muslims – there was a relationship between effort (i.e. labour intensity) and tax. Whereby labour-intensive farming methods resulted in paying less-tax; and effortless farming methods resulted in higher tax. It is also safe to assume that labour-intensive farming methods resulted in less crops and less profits therefore less tax; whereby effortless farming methods resulted in more crops and more profits therefore more tax.

zakat-the-third-pillar-of-islam-charity-and-tax

In the 21st Century the same wisdom can be applied at the behest of a government across all industries and sectors; wherby labour intensive services and products that are less profitable – are to pay a low rate of tax. However, effortless services and products that are more profitable – are to pay a higher rate of tax. An example of a labour-intensive product deserving of low tax in the 21st Century - would be a handmade painting. An example of an effortless product deserving of higher tax in the 21st Century - would be a printing company.

In summary: in the 7th Century the early Muslims had a low rate of tax for crop farmers who deployed labour-intensive farming methods. A higher rate of tax was levied upon crop farmers who deployed effortless farming methods. It is assumed that labour-intensive farming methods resulted in less profits, whereas effortless farming methods resulted in greater profits. In the 21st Century the same principles can be applied whereby labour-intensive services and products which are less profitable – pay a lower rate of tax. And effortless services and products which are more profitable – pay a higher rate of tax.

67. Why Did 7th Century Camel Farmers Pay The Lowest Rate of Tax?

In 700 A.D during the lifetime of the early Muslims, camel farmers paid 2% tax; 2% being the lowest rate of tax across all items upon which Zakat was due. The reason camel farmers paid the lowest rate of all tax, was due to a government strategy to incentivise and encourage the farming of camels. Camels in 7th Century ‘dessert’ Arabia were prized modes of transport – and vital for travel, commerce and war. To put the value of one camel into perspective, the cost to purchase one camel in 7th Century Arabia was more than the average annual salary.[172]

In summary: the reason camel farmers paid the lowest rate of all tax – was due to a government strategy to incentivise and encourage the farming of camels; because camels were vital modes of transport for the purposes of travel, commerce and war.

68. Interpolating 7th Century Camel Tax Into 21st Century Industries

It is evident that in the 7th Century during the lifetime of the early Muslims – camel farmers paid the lowest rate of tax across all items upon which Zakat was due. The reason camel farmers paid such a low rate of tax - was an attempt by the government to incentivise and encourage the farming of camels; because camels were highly prized and vital to the defence and economy of 7th Century Arabia.

In the 21st Century the same wisdom of low tax can be applied at the behest of a government across those industries and sectors – that the State considers vital to its defence and economy. A 21st Century example of a sector that is vital to a nations defence and economy is the motor vehicle industry.

69. Concluding Zakat Principle Three: Business Zakat

In 700 A.D during the lifetime of the early Muslims, the most common business in Arabia was agriculture; thus, livestock and crops. Islam’s basis for calculating business Zakat is solely based on the agricultural industry. However, in the 21st Century – new business sectors have developed – sectors such as technology, construction, retail, arts etc. In order to extrapolate 7th Century wisdom relating to agricultural tax, and insert ancient brilliance holistically across new industries and sectors of the 21st Century, a number of assumptions and analogies needed to be made so as to interpret agricultural policies into new business sectors.

In essence, business Zakat tax ranges between 2% - 20%; if your business has a minimum stock value or cash profit of between $4,485.51 - $6,087.60.[173] The range of business Zakat tax you pay, between 2% - 20% is dependent on the following factors:

  • High Labour Intensity leads to lower taxes
  • Low Labour Intensity leads to higher taxes
  • Businesses that are vital to the State pay lower taxes

The above economic policy of providing tax-cuts to businesses that are vital to the State, makes good economic sense – because it incentivises businesses to produce goods and services that are crucial to a State. However, providing tax-cuts to businesses that are highly labour intense, whilst heavily taxing businesses that are effortless, has both a positive and negative economic benefit/impact.

The positive economic benefits of providing tax-cuts to businesses that are highly labour intense, is that such a business keeps unemployment figures down (due to employing large numbers of workers) and remains profitable despite its high labour costs – due to paying less tax. However, the negative economic impact of providing tax-cuts to businesses that are highly labour intense, is that it hinders innovation and savings in efficiency - as businesses may choose to remain labour intense so as to benefit from lower tax. Consequently, heavily taxing businesses that are effortless, thus less labour intense – hinders the development of efficient systems, processes and innovative use of technology in the production of services and goods – due to the fear of being burdened with higher tax.

In summary, Islam’s basis for calculating business Zakat is solely based on the agricultural industry – which in the 21st Century needs interpolating to cover new business sectors. The amount of business Zakat one pays is between 2% - 20%; if a business has a minimum stock value or cash profit of between $4,485.51 - $6,087.60. Businesses that are vital to the State and/or are labour intense - pay a lower rate of tax; and businesses that are effortless/less labour intense pay a higher rate of tax. Islam’s economic policy of rewarding labour-intensity with low tax, has both a positive and negative economic benefit/impact. The positive benefit of Islam’s economic policy is that it attempts to keep unemployment down whilst keeping labour-intense businesses profitable, despite high labour costs. The negative impact of rewarding labour-intensive businesses with a tax-cut, is that it hinders the development of efficient systems, processes and innovative use of technology in the production of services and goods – for fear of being burdened with a high tax.

70. How To Decide Whether One Is Financially Liable To Pay Zakat Tax In Modern Times?

In order to decide whether you are liable to pay Zakat tax in modern times, one will need to answer the following questions.

1. Do I have gold, silver or cash between the values of $422.40 - $3,686.45? If ‘yes’, then you are liable to pay Zakat tax.

OR

2. Do I pay taxes and live in a welfare state? If yes, then you are ineligible to pay Zakat tax (see Should A Muslim Citizen Who Pays Taxes and Lives in a Welfare State – Also Pay the Zakat Tax?)

OR

3. Do I have savings that is between 50% - 66% of the national average salary? If ‘yes’, then you are liable to pay Zakat.

OR

4. Do I have savings that is equal or greater than the average % of national savings? If yes, you are liable to pay Zakat.

OR

5. Do I have a business with a minimum stock value or cash profits of between $4,485.51 - $6,087.60? If yes, then you are liable to pay Zakat

In conclusion, the above five questions need to be answered so as to determine whether one is liable to pay Zakat tax in modern times.

The first method involves counting your cash savings and evaluating your gold and silver; and if the value of your cash and precious metals is between $422.40 - $3,686.45 – then speak to a Zakat accountant and consider paying Zakat at a rate of 2.5%.

The second method is to determine whether you live in a welfare State and pay income tax, if yes, then consult a Zakat accountant as you are already paying Zakat and there may be no need to make any additional payments, unless you wish to do so voluntarily.

The third method is to determine whether you have savings that is between 50% - 66% of the average national salary, if yes, you are liable to pay the Zakat tax.

The fourth method is to determine whether you have savings that is equal or greater than the national savings (% of GDP) of the nation you are in; if yes, you are liable to pay the Zakat tax.

The fifth and final method is to evaluate your business stock and cash profits, and if the value is between $4,485.51 - $6,087.60; then, you are liable to pay Zakat at a rate of between 2% - 20% (dependent on business type - see Principle Three: Business Zakat

71. How Was The Zakat Tax Collected During The Early Islamic Period, And How Should Tax Be Collected

During the early Islamic period, the Zakat tax was collected manually via civil servants of the State. Tax collectors would visit the wealthy and calculate their due and transport it to a government depository. The State would then distribute and spend the Zakat tax accordingly.

…Allah’s Messenger (s) employed an employee (to collect Zakat) …

— SAHIH BUKHARI, HADITH NUMBER: 6636 [174]

In the modern era, Zakat tax can be collected in whatever manner the State deems to be efficient. This includes manually or electronically or any other means that is efficient.

In summary, during the early Islamic period, the Zakat tax was collected manually via civil servants of the State, otherwise known as the ‘taxman’. In the modern era, Zakat tax can be collected in any manner that the State deems efficient.

72. What Should Be The Relationship Between The Taxman And Debtor?

There is a requirement for mutual cooperation and trust between the taxman and debtor regarding the collection of Zakat. There is a responsibility upon the taxman to collect what is due, whilst not being corrupt (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 6636)[175] or overburdening to the debtor. Likewise, the debtor too has a responsibility to be willing and cooperative to the taxman and refrain from tax avoidance. In essence there is the need for mutual cooperation and trust between the taxman and debtor.

"…Please your Zakat collectors…

— SAHIH MUSLIM, HADITH NUMBER: [2298] 29 – (989) [176]

"…nor divide the property into various portions in order to avoid paying Zakat…

— SAHIH BUKHARI, HADITH NUMBER: 6955 [177]

…take Zakat from them but avoid (don’t take) the best property of the people as Zakat…

— SAHIH BUKHARI, HADITH NUMBER: 1458 [178]

73. How Is The Zakat Tax To Be Spent?

There are eight categories[179] mentioned in the Quran towards which Zakat can be spent, namely:

  1. The Poor - The Quranic term faqir (the poor) applies to those who depend for their subsistence on others. [180]
  2. The Needy - The Quranic term masakin (the needy) are those who cannot make both ends meet and face acute hardship, yet, whose sense of self-respect prevents them from asking for aid. The ‘needy’ are also those whose outward demeanour fails to create the impression that they are deserving of help.[181]
  3. Those Employed to Collect Zakat – Refers to to those appointed and employed by the State, to collect and manage the Zakat funds.
  4. Those Whose Hearts are to be Won – There is a spectrum of differing views as to what this means. In short, Zakat funds can be spent on building bridges between Muslims and non-Muslims through financial incentives. Zakat can also be spent towards inclining others to remain/become Muslim through financial aid.
  5. In the cause of the Slaves – This means that Zakat funds can be used to secure the freedom of slaves.
  6. Those Encumbered with Debt - This means that Zakat funds can be spent on those in the grip of debt – so as to achieve economic freedom.[182]
  7. In the way of Allah – This expression ‘in the way of Allah’ has a wide and general connotation and encompasses all good deeds which pleases God.[183] It includes those who are teaching or fighting[184] or in duties assigned to them by the State.
  8. The Wayfarers – This refers to a person cut off from any source of income because of being far away from home; such persons are to be helped even if they are wealthy in their home country.[185] A modern equivalent would be a refugee or emigrant undergoing hardship.

The Sadaqat (prescribed alms) are (meant) only to be given to the poor, the needy, to those employed to collect them, to those whose hearts are to be won, in the cause of the slaves and those encumbered with debt, in the way of Allah and to a wayfarer…

— QURAN, SURAH AT-TAWBAH, 9:60 - TRANSLATED BY: MUFTI MUHAMMAD TAQI UTHMANI [186]

The eight categories mentioned in the Quran towards which Zakat can be spent, can be sub-divided into three groups:

zakat-the-third-pillar-of-islam-charity-and-tax

In essense Group A consists of the primary purpose on which Zakat tax is to be spent - which is the alleviation of poverty and provision of welfare. Group B consists of other areas in which the Zakat tax can be spent - situations where the recipient may not necessarily be poverty stricken. And Group C is the allocation of Zakat funds for management purposes - such as salaries etc.

In summary, there are eight categories mentioned in the Quran towards which Zakat can be spent, namely:

  1. The Poor
  2. The Needy
  3. Those Employed to Collect Zakat
  4. Those Whose Hearts are to be Won
  5. In the cause of the Slaves
  6. Those Encumbered with Debt
  7. In the way of Allah
  8. The Wayfarers

In conclusion, there appears to be a subtle distinction that differentiates a faqir (the poor) from a masakin (the needy). A faqir is poor, and his/her status is obvious & evident; whereas a masakin is needy, and his/her condition is hidden and undisclosed. Both the faqir and masakin are poverty stricken and deserving of alms, the distinction being the faqirs condition is obvious and the masakins plight is concealed; nonetheless, both are deserving of aid. Furthermore, the alleviation of poverty and provision of welfare also extends to freeing slaves, those encumbered with debt, and wayfarers/travellers/refugees (etc.) that are stranded thus in need of financial help. Zakat can also be spent on those ‘whose hearts are to be won’, as well as those ‘in the way of Allah’; there is huge scope for differing views, opinions and interpretation as what these two terms mean and entail, but most importantly, it allows opportunity for Zakat to be spent on non-Muslims and Muslims as well those not necessarily poor. Lastly, Zakat tax can be spent on salaries and towards the hire or purchase of equipment and buildings (etc.) - necessary for the efficient management of Zakat. In short: the primary purpose of Zakat is to alleviate poverty and provide welfare to those in need. Notwithstanding, Zakat can also be spent in areas not related to poverty - if there is goodness to do so. Lastly, Zakat tax can be spent on management fees (whereby the term ‘I work for a charity, not for charity’ comes to mind).

74. Discouragement Of Begging To Financially Aid Oneself

Begging for finance (to aid oneself) without a genuine and valid cause is unanimously discouraged. What is encouraged is hard work and effort so as to earn a living.

"…Allah's Messenger (s) while on the pulpit mentioned about As-Sadaqa (charity), and to abstain from asking others for some financial help, and begging others…

— SAHIH BUKHARI, HADITH NUMBER: 1429 [187]

“…If one of you were to take his rope (or ropes) and go to the mountains, and bring a bundle of firewood on his back to sell, and thus become independent of means, that would be better for him than begging...”

— SUNAN IBN MAJAH, HADITH NUMBER: 1836, GRADED: SAHIH [188]

However, under exceptional circumstances such as extreme poverty or severe debt etc. one may momentarily beg others for some financial help - to aid oneself - until a burden is lifted. Notwithstanding, the below is an exception to the norm, the norm being to refrain from begging whilst endeavouring towards hard-work and effort so as to earn a living.

“…Begging is not allowed except for three (people): A very poor person, or for one in severe debt, or for a painful blood (blood-money).”

— SUNAN ABU DAWUD, HADITH NUMBER: 1641, GRADED: HASAN [189]

In summary, begging to financially aid oneself is discouraged. Instead, hard-work and effort towards earning a living is encouraged. Notwithstanding, under exceptional circumstances - one may momentarily beg others for some financial help - to aid oneself - until a burden is lifted.

75. Should A Muslim Citizen Who Pays Taxes and Lives in a Welfare State – Also Pay the Zakat Tax?

The newly established State (in Medina) that Muhammad (s) created in the 7th Century was a Welfare State that sought to alleviate poverty and promote well-being – via the tax collected through Zakat. Similarly, in the 21st Century there are Welfare States that collect various taxes - with which poverty is tackled and the well-being of people sought. Therefore, in the 21st Century it can be argued: that if the nation in which you live is a Welfare State, and you pay your taxes (with which poverty is tackled and the well-being of people sought), then, you are already paying towards a form of Zakat. Thus, in the 21st Century there is no obligation to make additional private Zakat payments, so as long as you live in a Welfare State and pay your obligatory taxes. Notwithstanding, even though the obligatory Zakat levy is fulfilled by those paying taxes in a Welfare State, greed should not prevent thee from making regular charitable donations.

Welfare State:

A system that allows the government of a country to provide social services such as healthcare, unemployment benefit, etc. to people who need them, paid for by taxes.

— REFERENCE: CAMBRIDGE DICTIONARY [190]

In essence: Muhammad (s) in the 7th Century through Zakat - funded a Welfare State in Medina. Likewise, in the 21st Century there are Welfare States that are funded through various taxes in which poverty is tackled, and the well-being of people sought. Therefore, if you pay taxes in a Welfare State, then, you are already contributing towards a type of Zakat (with which poverty is tackled and the well-being of people sought); thus, there is no further obligation to make additional private Zakat payments. Nonetheless, even though the obligatory Zakat levy is fulfilled by those paying taxes in a Welfare State, it is a noble trait to be charitable and generous; for charity is a loan to God, which Allah will return to you with a manifold increase - either in this life and/or in the afterlife.

76. How To Decide The Zakat Tax Due Date In Modern Times?

There are two methods of deciding the Zakat Tax due date. [191] The first method is to note the Islamic Lunar Date on which you first reach the Zakat threshold. This is to say the first date on which your savings reach $422.40 ($422.40 being the Zakat Threshold at current rates [18th June 2016] for 640g of silver). Let’s assume that on the 1st Ramadan you had $422.40 in savings (and continue to have $422.40 or above in Savings throughout the year); then, each year forth your Zakat Tax will be due on the 1st Ramadan because this is the date on which you first reached the Zakat threshold of $422.40.

However, if during the course of the year your savings drops below the Zakat threshold of $422.40; then, your new Zakat Tax due date will be on the day on which your savings recovers to or above $422.40. For example, let’s say on the 1st Ramadhan you had $422.40; but on the 15th Ramadhan you have $300.00, but then on the 20th Ramadhan you recover to $422.40. Therefore, your new Zakat Tax due date will be on the 20th Ramadhan each year forth because that is the new date on which you recovered and reached the Zakat threshold of $422.40. In essence, with this method, the Zakat Tax due date is subject to change - if your savings falls below the Zakat Tax threshold; with your new Zakat Tax due date being the day on which your savings recovers to a point above or equal to the Zakat Tax threshold.

The second method of calculating the Zakat Tax due date is to select any Islamic Lunar date, and to remain fixed on this date for as long as you live. This is to say, if you decide to pay the Zakat Tax - every year - on the 1st Ramadhan, then, you are committed to continue paying the Zakat Tax on the 1st Ramadhan every year forth. With this method, some years you may not be liable to pay the Zakat tax if you fail to reach the Zakat Tax threshold on the 1st Ramadhan; because you are only liable to pay the Zakat Tax if you reach the Zakat Tax threshold on the 1st Ramadhan in any given year.

For example, let’s say in Year 1 on the 1st Ramadhan you do reach the Zakat Tax threshold of $422.40 ($422.40 being the Zakat Threshold at current rates [18th June 2016] for 640g of silver), then, you are eligible to pay the Zakat Tax in Year 1. However, if in Year 2 on the 1st Ramadhan you fail to reach the Zakat Tax threshold of $422.40, because you have $300.00 then, you are not required to pay the Zakat Tax in Year 2 as you are below the Zakat Tax threshold of $422.40. In essence, with this method the Zakat Tax due date is always fixed.

In summary, there are two methods of deciding the Zakat tax due date: the first method is to keep a constant track of your finance, and maintaining awareness of your savings - and noting the dates on which your savings fall and reach above the Zakat tax threshold. The date on which your savings reaches the Zakat threshold – is your annual Zakat due date. The second method of calculating the Zakat Tax due date is to pick any Islamic lunar date, and remain committed to paying your Zakat tax on this date; subject to reaching or exceeding the Zakat threshold on your chosen date in that year.

77. What Was The Fiscal Year End In The Early Islamic Period?

In March 895 A.D / Al-Muharram 282 A.H;[192] The Caliph Abu al-Abbas al-Mu’tadid bi-llah[193] declared the first Islamic fiscal year end to be 11th June 895 A.D [194] / 14th Rabi Al-Thani 282 A.H.[195] Similarly, in the UK, the annual fiscal year end is 5th April 2017 A.D / 9th Rajab 1438 A.H. The fiscal year end is the date by which all taxes are to be paid. The reason al-Mu’tadid (in March 895 A.D / Al-Muharram 282 A.H) declared the fiscal year end to be 11th June 895 A.D / 14th Rabi Al-Thani 282 A.H - was to align tax collection with the harvest.

Prior to the Islamic fiscal year end (11th June 895 A.D / 14th Rabi Al-Thani 282 A.H); a type of tax called kharaj was collected on the first day of the Persian New Year; this day was called Nayruz or Nawruz. The Muslim governors of Persia, initially collected this kharaj tax - on Persian harvest - inline with the Persian calendar. However, in order to keep this Persian calendar in sync with the seasons, one day needed to be added every four years, similar to the leap year of the Gregorian calendar of today. But, the Muslim governors of Persia disregarded or overlooked this rule - and did not add one day every four years to the Persian calendar. Therefore, over time, the Persian calendar fell out of sync with the seasons; which led to tax requests being made on crops, before the harvest was ready.[196] In order to rectify the issue of premature tax requests on crops, al-Mu’tadid introduced a new fiscal end date that aligned with the seasonal harvest.

In essence, the Persian calendar fell out of sync with the seasonal harvest, which led to premature tax requests being made on crops. In order to realign the seasons with the harvest, al-Mu’tadid decleared in March 895 A.D / Al-Muharram 282 A.H; that the Islamic fiscal year end will be 11th June 895 A.D / 14th Rabi Al-Thani 282 A.H.

78. Other Sources Of Early Islamic Revenue

Other sources of government revenue during the early Islamic period included: Kharaj, Khums, Jizyah, Zakat al-fitr and Kaffarah.

  • Kharaj – is a tax / rent imposed on agricultural land.[197] The Kharaj tax / rent is paid by both Muslims and non-Muslims.[198] Kharaj paid by Muslims has its own technical term called ‘Ushr’ - and is a form of Zakat which has spiritual benefits; whereas Kharaj paid by non-Muslims has no spiritual benefits.[199] The amount to be paid to the State is determined by a number of factors such as fertility of the soil, type of crop and type of irrigation;[200] and there is no bearing as to whether one is Muslim or non-Muslim in terms of the sum owed to the State.
  • Khums – is to give one-fifth of war booty to the ruler.[201] War booty in Arabic is called ‘ghanima’ which refers to weapons, horses and all moveable possessions taken in battle from unbelievers.[202] One-fifth of Khums also includes mines (Khums al-Maadin) and buried treasure (Khums of Rikaz).[203] According to Shia littrature, Khums is collected annually, and is the duty of every Muslim to pay the Khums tax on everything of economic value, regardless of whether the asset was acquired in battle with unbelievers or through trade, agriculture, or industry. [204]
  • Jizyah – is an annual head tax or poll tax imposed on non-Muslim citizens living within an Islamic State. The payment of Jizya allows non-Muslims to opt out of military service, and payment of other taxes imposed on Muslims, such as Kaffarah. Jizyah also symbolises the submission of non-Muslims to the suzerainty of Islam. [205] In essence, Muslims pay Zakat, and non-Muslims pay Jizyah, thus ensuring all equally within an Islamic State pay tax, albeit named differently.
  • Zakat al-fitr – is an annual tax paid at the end of Ramadan by Muslim citizens living within an Islamic State.
  • Kaffarah – is a fine in cash or in kind that Muslims pay for committing certain transgressions. For example, a person who failed to fast on one of the days of Ramadan had to feed sixty poor people for a specified period of time as expiation for his sins. Other kinds of kaffarah are mentioned in books of jurisprudence.[206]
zakat-the-third-pillar-of-islam-charity-and-tax

79. Why Did Muhammad (s.a.w) Not Accept Charity For Himself Or His Family?

The reason Muhammad (s) did not accept charity for himself or his family, is because, the Prophet (s) did not want to be accused of profiting from prophethood.[207] However, the Prophet (s) would instead accept gifts, as opposed to charity (English Translation of Sunan An-Nasai Hadith 2614, Hasan).[208]

80. Consequence Of Muhammad (s) Decision To Not Accept Charity For Himself or His Family

The positive consequence of Muhammad (s) not accepting charity for himself or his family, was that none could accuse the Prophet (s) of claiming prophethood, in order to amass wealth. The negative consequence of Muhammad (s) decision to avoid charity for himself or his family, was that it caused political tensions amongst the early Muslims – after the death of Mohammed (s), centering on inheritence.

The cause of tension was the Prophet (s) properties in Khaibar, Fadak and Medina. After the death of Mohammed (s) – the Prophet (s) family (Ali and Fatima) believed they were entitled to inherit Mohammed (s) properties; but the rulers (Abu Bakr and later Umar) disagreed, disagreed on the basis that ‘whatever Prophets leave behind after death – is to be used for charity’. And as the Prophet (s) family cannot / do not accept charity, the family therefore can not inherit the Prophet (s) properties as inheritance – because the Prophet (s) properties are to be donated to charity, charity which the Prophet (s) family are ineligible to receive.

Abu Bakr said to Fatima, “Allah’s Messenger said, ‘Our property will not be inherited, whatever we (i.e., Prophets) leave is Sadaqa (to be used for charity).’” Fatima, the daughter of Allah’s Messenger got angry and stopped speaking to Abu Bakr, and continued assuming that attitude till she died…

— SAHIH BUKHARI, HADITH NUMBER: 3093 [209]

81. What Are The Political Consequences For Citizens Not Paying Zakat?

Refer to - What Was Abu Bakr (ra) Attitude Towards Muslim Apostates?

82. What Are The Spiritual Consequences Of Not Paying Zakat?

There are numerous spiritual consequences for not paying Zakat, far too many for me to list. Therefore, I shall mention only one of the many consequences.

… Whoever is made wealthy by Allah and does not pay the Zakat of his wealth, then on the Day of Resurrection his wealth will be made like a bald-headed poisonous male snake with two black spots over the eyes (or two poisonous glands in its mouth). The snake will encircle his neck and bite his cheeks and say, ‘I am your wealth, I am your treasure.’”

— SAHIH BUKHARI, HADITH NUMBER: 1403 [210]

83. Similarities Between Biblical Tithe And Quranic Zakat

Much like Zakat mentioned within Islamic literature, the Bible too mentions, Tithe. Tithe means ‘tenth’ – whereby lay people contributed a 10th of their income for religious purposes, often under legal obligation. The money (or its equivalent in crops, farm stock, etc.) was used to support the clergy, maintain churches, and assist the poor.[211]

Similarly, Zakat is also a financial contribution whereby wealthy people contribute between 2% - 20% of their savings, primarly for the alleviation of poverty (as well as expenditure in other areas). There are perhaps many subtle distictions between Tithe and Zakat – many of which I am unaware of due to my limited research into Christianity. However, an obvious distinction between Zakat and Tithe seems to be: Zakat is paid on savings, whereas Tithe is paid on income; and I am unaware of the advantages and disadvantages of either approach – i.e. whether to tax people on their income or savings.

84. Why Is Zakat The Third Pillar of Islam?

The reason as to ‘why’ Zakat is the third pillar of Islam; is because, Zakat was the third aspect of Islam that Mohammed (s) mentioned, when the Prophet (s) was asked to explain Islam.

Gabriel (as) said: “O Muhammad (s), tell me about Islam.'

The Messenger of Allah (s) said: ‘Islam means to bear (1) witness that none has the right to be worshipped but Allah, and that Muhammad is the Messenger of Allah; (2) to establish the Salât, (3) to pay the Zakat, (4) to fast (the month of) Ramadhan and (5) to perform pilgrimage to the House (the Ka’ba), if you have the means.

— SAHIH MUSLIM, HADITH NUMBER: [93] 1 – (8) [212]

85. Concluding The Third Pillar Of Islam – Zakat

Zakat is both charity and tax. Zakat is considered charity - when paid voluntarily, without specifying an amount. But Zakat is also a tax - if a specific amount is a requested by the State. Zakat was initially a voluntary contribution, that became an obligatory duty in either the second or eighth year of Hijrah.

The spiritual and philosophical understanding of charity from an Islamic perspective, is that charity is a loan to God, which Allah will return to you with a manifold increase - either in this life and/or in the afterlife. And it is better to give charity privately, but it is not wrong to give publically. When donating, one should give as much as he/she can afford - ensuring one does not overburden him/herself to the point that he/she resorts to begging or becomes impoverished. Notwithstanding, philanthropy is an exceptionally good deed – but only if you avoid poverty for yourself and family.

Charity is commonly a monetary contribution, but charity can also be an act of goodness - for every good deed is charity. A smile is charity, being fair is charity, helping others is charity, speaking goodness is charity, walking to the mosque is charity and removing litter is charity, etc. In essense, anything you give or do with the hope of earning a recompense from our Lord - is charity. And it is always a good time to be charitable, because the Lord does return to you, your charity with a manifold increase - albeit in this life and/or in the afterlife. And be weary of greed, for greed is innate within Man; the cure to which is, charity.

Charity begins at home, and it is more rewarding to be charitable - towards your own kin, than it is to be charitable those outside of kinship. Because donating to kin - strengthens family ties, as well as fulfils the duty / deed of charity.

Zakat in the sense of tax, is an obligatory sum that is paid by the rich to the State; the objective of Zakat being, primarily to alleviate poverty. The Zakat funds are to be managed by the State and spent towards the creation of a Welfare system. The tax is to be spent on the same area from which it was collected; but under exceptional circumstances can be distributed elsewhere. Bussiness rates for Zakat ranges between 2% - 20%; the lower rate of tax being for those businesses that are vital to the State; or for those businesses that are labour intense. A higher rate of tax is levied on those businesses considered to be less labour intense. The political consequence of not paying tax is severe; as is the spiritual fallout. As is the case in many nations, tax pays for the services and upkeep of a country; therefore, any threat to the finances of a nation, is met with force.

In summary: Zakat is both charity and tax. Zakat is a charity when paid voluntarily without specifying an amount; but is also a tax when a specific amount is requested by the State. The Islamic philosophy of charity - is that it is a loan to God, that is better given in secret - which will return to you with a manifold increase - either in this life and/or in the afterlife. Charity comes in many forms, and anything you give or do with the hope of earning a recompense from the Lord - is charity. Charity begins at home. And Zakat in the sense of tax, is a levy paid on the savings of the wealthy – primarily for the alleviation of local poverty.

86. Statistical Data & Equations

Data Tables:

zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax
zakat-the-third-pillar-of-islam-charity-and-tax

87. References:

[1] At-Tirmidhi, Imam Hafiz Abu Eisa Mohammad Ibn Eisa. English Translation of Jami At-Tirmidhi. Ed. Hafiz Abu Tahir Zubair Ali Zai, et al. Trans. Abu Khaliyl. First. Riyadh: Maktaba Dar-us-Salam, 2007. p.649-650 Vol.6.

[2] Ibid., p.75, vol.2

[3] Ibid., p.76, vol.2

[4] Al-Bukhari, Muhammad Ibn-Ishmaiel. The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English. Ed. Muhammad Muhsin Khan, et al. 2nd. Riyadh: Maktaba Dar-us-Salam, 1997. p58 Vol.1.

[5] An-Nasai, Imam Hafiz Abu Abdur Rahman Ahmad bin Shuaib bin Ali. English Translation of Sunan An-Nasai. Ed. Hafiz Abu Tahir Zubair Ali Zai, et al. First. Riyadh: Maktaba Dar-us-Salam, 2007. p.305, Vol. 3.

[6] Bewley, Aisha. A Glossary of Islamic Terms. Ed. Bookwork Norwich. London: Ta-Ha Publishers, 1998. p.130.

[7] Qadhi, Yasir. Shaykh Dr. Yasir Qadhi's Official YouTube Channel. 31 October 2012. 06 June 2016. <https://www.youtube.com/watch?v=F-EJiuhVHE0>.

[8] Al-Mubarakpuri, Safiur-Rahman. Ar-Raheequl Makhtum - The Sealed Nectar - Biography of the Noble Prophet. Ed. Abdul Malik Mujahid. First. Riyadh: Dar-us-Salam, 1996. p.46-47

[9] Kathir, Ibn. Tafsir Ibn Kathir (Abridged). Ed. Safiur-Rahman Al-Mubarakpuri. Second. Riyadh: Maktaba Dar-us-Salam, 2003. p.510, Vol.4

[10] Ibid., p.684 vol.1.

[11] Al-Qazwini, Imam Muhammad Bin Yazeed Ibn Majah. English Translation Of Sunan Ibn Majah. Ed. Hafiz Abu Tahir Zubair Ali Zai, et al. First. Riyadh: Maktaba Dar-us-Salam, 2007. p.21, Vol.3.

[12] (Tafsir Ibn Kathir (Abridged) p.60, Vol. 2) op. cit., note 9,

[13] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.377, Vol. 1) op. cit., note 4

[14] (Tafsir Ibn Kathir (Abridged) p.60, Vol. 2) op. cit., note 9

[15] Shafi, Maulana Mufti Muhammad. Ma'ariful-Quran. Ed. Justice Mufti Muhammad Taqi Usmani. Trans. Prof. Muhammad Hasan Askari and Prof. Muhammad Shamim. Karachi: Maktaba-e-Darul-'Uloom, 1995. p.662, Vol. 1

[16] (English Translation of Jami At-Tirmidhi p.357 Vol.6) op. cit., note 1

[17] (Ar-Raheequl Makhtum - The Sealed Nectar - Biography of the Noble Prophet p.46-47) op. cit., note 8

[18] Qadhi, Yasir. Shaykh Dr. Yasir Qadhi's Official YouTube Channel. 31 October 2012. 06 June 2016. <https://www.youtube.com/watch?v=F-EJiuhVHE0>.

[19] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p296, Vol. 2) op. cit., note 4

[20] Ibid., p.298 vol.2.

[21] Ibid., p.222 vol.2.

[22] (English Translation of Jami At-Tirmidhi p.357 Vol.6) op. cit., note 1

[23] Ibid., p.72 vol.4.

[24] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.146, Vol. 4) op. cit., note 4

[25] (English Translation of Sunan An-Nasai p.367 Vol. 3) op. cit., note 5

[26] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.146, Vol. 4) op. cit., note 4

[27] Ibid.,

[28] Ibid., p.289 vol.2.

[29] (English Translation of Jami At-Tirmidhi p.649-650 Vol.6) op. cit., note 1

[30] (Tafsir Ibn Kathir (Abridged) p.684, Vol. 1) op. cit., note 9

[31] (English Translation of Sunan An-Nasai p.369 Vol. 3) op. cit., note 5

[32] Al-Hajjaj, Imam Abul Hussain Muslim Ibn. English Translation Of Sahih Muslim. Ed. Hafiz Abu Tahir Zubair Ali Zai, Abu Khaliyl and Nasiruddin al-Khattab. First. Riyadh: Maktaba Dar-us-Salam, 2007. p.91 Vol.3.

[33] Ibid., p.50 vol.3.

[34] (English Translation Of Sunan Ibn Majah p.51, Vol. 3) op. cit., note 11

[35] (English Translation of Sunan An-Nasai p.394 Vol. 3) op. cit., note 5

[36] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.313, Vol. 2) op. cit., note 4

[37] (English Translation Of Sunan Ibn Majah p.51, Vol. 3) op. cit., note 11

[38] Ibid.,

[39] DICTIONARIES, Collins (2015). Collinsdictionary.com. [online]. http://www.collinsdictionary.com/dictionary/english/stingy

[40] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.302, Vol. 2) op. cit., note 4

[41] (English Translation of Jami At-Tirmidhi p.119 Vol.2) op. cit., note 1

[42] Ibid.,

[43] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.291-292, Vol. 2) op. cit., note 4

[44] Ibid., p.90 vol.8.

[45] Muhammad Aashiq Elahi Muhajir Madani. Illuminating Discourses on the Noble Quran (Tafsir Anwarul Bayan). Ed. Afzal Hussain Elias and Muhammad Arshad Fakhri. First. Karachi: Darul-Ishaat, 2005. p.327, Vol.1.

[46] altafsir.com. 2015. Royal Aal al-Bayt Institute for Islamic Thought. <http://www.altafsir.com/ViewTranslations.asp?Display=yes&SoraNo=35&Ayah=32&toAyah=32&Language=2&LanguageID=2&TranslationBook=21>.

[47] (English Translation Of Sunan Ibn Majah p.509, Vol.5) op. cit., note 11

[48] DICTIONARIES, Collins (2017). Collinsdictionary.com. [online]. https://www.collinsdictionary.com/dictionary/english/usury

[49] Ibid., https://www.collinsdictionary.com/dictionary/english/interest

[50] The Study Quran. Ed. Seyyed Hossein Nasr, et al. First. New York: Harper Collins, 2015. p.120

[51] (English Translation Of Sahih Muslim p.437 Vol.7) op. cit., note 32

[52] Financial Conduct Authority. Publications: PS14/16: Detailed rules for the price cap on high-cost short-term credit - Including feedback on CP14/10 and final rules. 02 January 2015. Website. 17 December 2017. <https://www.fca.org.uk/publications/policy-statements/ps14-16-detailed-rules-price-cap-high-cost-short-term-credit>.

[53] (altafsir.com) op. cit., note 53

[54] (English Translation Of Sunan Ibn Majah p.17, Vol.3) op. cit., note 11

[55] Sadr, Seyed Kazem. “The Economic System of the Early Islamic Period.” Ed. Hossein Askari and Dariush Zahedi. New York: Palgrave Macmillan, 2016. p.70.

[56] DICTIONARIES, Collins (2016). Collinsdictionary.com. [online]. http://www.collinsdictionary.com/dictionary/english/tax

[57] (Ar-Raheequl Makhtum - The Sealed Nectar - Biography of the Noble Prophet p.76) op. cit., note 8

[58] Qadhi, Yasir. YouTube - Memphis Islamic Center (MIC). 2012. Video. 2016. <https://www.youtube.com/watch?v=DuTr6LeoQHI>.

[59] Khan, Abid. Who has to pay Zakat? 30 June 2015. Video. 05 June 2017. <https://www.nzf.org.uk/Knowledge/Calculation_Rules/Who_has_to_Pay_Zakat_Calc>.

[60] Ibid.,

[61] Ibid.,

[62] Ibid.,

[63] Ibid.,

[64] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[65] Ibid.,

[66] Friedman, Milton. Money: Encyclopaedia Britannica. Ed. Robert Lewis, et al. n.d. Website. 2016. <http://www.britannica.com/topic/money>.

[67] Abbot, George, et al. The Economics Book - Big Ideas Simply Explained. Ed. Niall Kishtainy. First American Edition. New York: DK Publishing, 2012. p.24.

[68] (Money: Encyclopaedia Britannica) op. cit., note 66

[69] O'Sullivan, Arthur and Steven M. Sheffrin. Economics Principles In Action. Boston: Pearson Prentice Hall, 2007. p.248.

[70] Ibid., p.246-247

[71] How the Fiat System Works: For Dummies. n.d. A Wiley Brand. Website. 2016. <http://www.dummies.com/how-to/content/how-the-fiat-system-works.html>.

[72] (Economics Principles In Action p.248) op. cit., note 69

[73] (How the Fiat System Works: For Dummies) op. cit., note 71

[74] Imam Malik ibn Anas. Al-Muwatta of Imam Malik ibn Anas. Trans. Aisha Abdurrahman Bewley. Abingdon: Routledge, 2010.

[75] (The Economic System of the Early Islamic Period p.140) op. cit., note 55

[76] DICTIONARIES, Collins (2016). Collinsdictionary.com. [online]. http://www.collinsdictionary.com/dictionary/english/purchasing-power

[77] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[78] Based on: Table 3 - Cost of Goods and Services Compared to Salaries during the early Islamic period

[79] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[80] Ibid.,

[81] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.92, Vol. 1) op. cit., note 4

[82] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[83] Ibid.,

[84] Based on: Table 5 - Zakat Tax Amount Due in relation to the minimum value of Commodities

[85] Ibid.,

[86] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[87] Based on: Table 6 – Min. Zakat Tax Quantities Converted into US$ [2016 A.D]

[88] Based on: Table 5 - Zakat Tax Amount Due in relation to the minimum value of Commodities & Table 6 – Min. Zakat Tax Quantities Converted into US$ [2016 A.D]

[89] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[90] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[91] Ibid.,

[92] Ibid.,

[93] Table 4 – Commodities on which Zakat Tax was due - converted into currency – Dirhams & Dinars,

[94] Table 33 – Muslim World (OIC) – Savings,

[95] Ibid.,

[96] Extract of: Table 33 – Muslim World (OIC) – Savings & Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya

[97] Based on: Table 8 – Muslim World (OIC) - Zakat/Jizya Based on Average National Savings (excluding debt) [2016 A.D]

[98] (International Monetary Fund (IMF) Factsheet - A Guide To Committees Groups And Club. 26 September 2016. Website. 31 March 2017. <http://www.imf.org/en/About/Factsheets/A-Guide-to-Committees-Groups-and-Clubs>.)

[99] Extract of: [Table 33 – Muslim World (OIC) – Savings] & [Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya] & [Table 34 - Developed Nations – Savings p.137] & [Table 42 - Developed Nations - Individual Zakat or Jizya and National Zakat or Jizya]

[100] Based on: Table 9 – Muslim World & G7 – Comparing Average Individual Zakat/Jizya and Average Individual Savings (excluding debt) [2016 A.D] Table 8 – Muslim World (OIC) - Zakat/Jizya Based on Average National Savings (excluding debt) [2016 A.D]

[101] Extract of: [Table 33 – Muslim World (OIC) – Savings] & [Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya]

[102] Based on: Table 10 – Muslim World (OIC) - Zakat/Jizya Based on Average National Savings (minus debt) [2016 A.D]

[103] Extract of: [Table 33 – Muslim World (OIC) – Savings] & [Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya] & [Table 34 - Developed Nations – Savings] & [Table 42 - Developed & Emerging Nations - Individual Zakat or Jizya and National Zakat or Jizya]

[104] Based on: Table 11 – Muslim World (OIC) - Zakat/Jizya Based on Average National Savings (minus debt) [2016 A.D]

[105] Extract of: [Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya]

[106] Based on: Table 12 – Organisation of Islamic Cooperation (OIC) – Comparing Zakat Tax - deducting & excluding debt [2016 A.D]

[107] Extract of: [Table 42 - Developed & Emerging Nations - Individual Zakat or Jizya and National Zakat or Jizya]

[108] Based on: Table 13 – Organisation of Islamic Cooperation (OIC) – Comparing Zakat Tax - including & excluding debt [2016 A.D]

[109] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[110] Table 4 – Commodities on which Zakat Tax was due - converted into currency – Dirhams & Dinars

[111] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[112] Extract of: Table 33 – Muslim World (OIC) – Savings

[113] Based on: Table 15 – Muslim World (OIC) – Relationship Between Salary & Savings [% of salary]

[114] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[115] Table 38 - Developed Nations (G7) - Employment Data

[116] (The Economic System of the Early Islamic Period p.47) op. cit., note 55

[117] Central Intelligence Agency. The World Factbook: Country Comparison - Gross National Savings. n.d. Website. 23 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/rankorder/2260rank.html>.

[118] (Al-Muwatta of Imam Malik ibn Anas - Hadith: 17.2.7 ) op. cit., note 74

[119] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[120] Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[121] (Al-Muwatta of Imam Malik ibn Anas - Hadith: 17.2.7 ) op. cit., note 74

[122] Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[123] Extract of: Table 33 – Muslim World (OIC) – Savings & Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya

[124] Based on: Table 8 – Muslim World (OIC) - Zakat/Jizya Based on Average National Savings (excluding debt) [2016 A.D]

[125] (Al-Muwatta of Imam Malik ibn Anas - Hadith 17.2.7) op. cit., note 74

[126] (English Translation of Jami At-Tirmidhi p.615 Vol.6) op. cit., note 1

[127] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[128] Ibid.,

[129] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.289, Vol.2 - Hadith 1416) op. cit., note 4

[130] (English Translation of Jami At-Tirmidhi p.615 Vol.6) op. cit., note 1

[131] Bullion By Post. 01 August 2016. Website <https://www.bullionbypost.co.uk/>.

[132] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[133] (Bullion By Post) op. cit., note 131

[134] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[135] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.92, Vol.1 - Hadith 63) op. cit., note 4

[136] Ibid.,

[137] Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money),

[138] Ibid.,

[139] Table 14 – Early Islamic Period [700’s A.D.] Salary & Savings Comparison

[140] Table 33 – Muslim World (OIC) – Savings

[141] Table 33 – Muslim World (OIC) – Savings

[142] Ibid.,

[143] Table 33 – Muslim World (OIC) – Savings

[144] Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya

[145] Table 42 - Developed & Emerging Nations - Individual Zakat or Jizya and National Zakat or Jizya

[146] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[147] Ibid.,

[148] National Zakat Foundation. Where should Zakat be distributed? 09 June 2015. Video. 05 June 2017. <https://www.nzf.org.uk/Knowledge/Introductory_Knowledge/Where_should_Zakat_be_distributed>.

[149] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[150] Ibid.,

[151] Ibid.,

[152] Extract of: [Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya]

[153] Based on: Table 17 – Muslim World (OIC) – 2.5% of Gross National Savings [2016 A.D] Table 8 – Muslim World (OIC) - Zakat/Jizya Based on Average National Savings (excluding debt) [2016 A.D]

[154] Extract of: [Table 42 - Developed & Emerging Nations - Individual Zakat or Jizya and National Zakat or Jizya]

[155] Based on: Table 18 – Group Of 7 (G7) – 2.5% of Gross National Savings [2016 A.D]

[156] Extract of: [Table 41 - Organisation of Islamic Cooperation (OIC) - Individual Zakat or Jizya and National Zakat or Jizya] & [Table 42 - Developed & Emerging Nations - Individual Zakat or Jizya and National Zakat or Jizya]

[157] Based on: Table 19 – OIC & G7 – Comparing the G7 and Muslim World – if 2.5% of Gross National Savings Were to Be Spent Towards Alleviating Local Poverty [2016 A.D]

[158]Extract of: [Table 39 – Muslim World (OIC) - Official Development Assistance (ODA) Data] and [Table 31 – Muslim World (OIC) – Poverty Data]

[159] Based on: [Table 20]

[160]Extract of: [Table 40 - Developed & Emerging Nations - Official Development Assistance (ODA) Data] and [Table 32 - Developed Nations (G7) - Poverty Data]

[161] Based on: [Table 21 – G7 – Percentage of Population Below Poverty, and, Distribution of 2.5% of Gross National Savings Locally [2016 A.D]]

[162] Extract of: [Table 31 – Muslim World (OIC) – Poverty Data] & [Table 32 - Developed Nations (G7) - Poverty Data] & [Table 39 – Muslim World (OIC) - Official Development Assistance (ODA) Data] & [Table 40 - Developed & Emerging Nations - Official Development Assistance (ODA) Data]

[163] Based on: Table 22 – OIC & G7 – Comparing the G7 and Muslim World – if 2.5% of Gross National Savings Were to Be Distributed Locally to Citizens Below Poverty [2016 A.D]

[164]Extract of: [Table 39 – Muslim World (OIC) - Official Development Assistance (ODA) Data]

[165] Based on: [Table 23 – Muslim World (OIC) – Foreign Aid in Relation to Gross National Savings [2017 A.D]]

[166] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[167] Shakir, Zaid. Where should Zakat be distributed? 09 June 2015. Video. 05 June 2017. <https://www.nzf.org.uk/Knowledge/Introductory_Knowledge/Where_should_Zakat_be_distributed>.

[168] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English - Hadith 63, p.92, Vol. 1) op. cit., note 4

[169] Ibid.,

[170] Extract of: Table 27 - Converting 7th Century Dinars & Dirhams (and Commodity Money) into 21st Century US$ (Fiat Money)

[171] Ibid.,

[172] Ibid.,

[173] Ibid.,

[174] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p334, Vol. 8) op. cit., note 4

[175] Ibid.,

[176] (English Translation Of Sahih Muslim p.34 Vol.3) op. cit., note 32

[177] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p68, Vol. 9) op. cit., note 4

[178]Ibid., p.312, vol.2

[179] (English Translation of Jami At-Tirmidhi p.649-650 Vol.6) op. cit., note 1

[180] Mawdudi, Sayyid Abul A'la. Towards Understanding The Quran Abridged Version of Tafhim al-Quran. Ed. Zafar Ishaq Ansari. London: The Islamic Foundation, 1988. p.221, Vol.3

[181] Ibid.,

[182] Ali, Abdullah Yusuf. The Holy Quran - English translation of the Meanings and Commentary. Ed. IFTA, Call and Guidance The Presidency of Islamic Researches. Al-Madinah Al-Munawarah: King Fahd Holy Quran Printing Complex, 1989. p.519

[183] (Towards Understanding The Quran Abridged Version of Tafhim al-Quran p.224, Vol.3) op. cit., note 180

[184] (The Holy Quran - English translation of the Meanings and Commentary p.519) op. cit., note 182

[185] (The Study Quran p.523) op. cit., note 50

[186] (altafsir.com) op. cit., note 53

[187] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p.296, Vol. 2) op. cit., note 4

[188] (English Translation Of Sunan Ibn Majah p.51, Vol.3) op. cit., note 11

[189] Ashath, Imam Hafiz Abu Dawud Sulaiman bin. English Translation of Sunan Abu Dawud. Ed. Hafiz Abu Tahir Zubair Zai, et al. First. Riyadh: Maktaba Dar-us-Salam, 2008. p.291 Vol.2.

[190] Cambridge Dictionary. Vers. dictionary.cambridge.org/. n.d. 2017. http://dictionary.cambridge.org/dictionary/english/welfare-state

[191] National Zakat Foundation. How to calculate my Zakat. 01 July 2015. Video. 01 October 2017. <https://www.nzf.org.uk/Knowledge/Calculation_Rules/How%20to%20calculate%20my%20Zakat>.

[192] al-Tabari, Abu Jafar Muhammad b. Jarir. The History of al-Tabari - Volume 38 - The Return of the Caliphate to Baghdad. Ed. Said Amir Arjomand, et al. New York: State University of New York Press, 1985. p.19.

[193] Ibid., p.1,

[194] Ibid., p.19,

[195] IslamiCity: Hijri-Gregorian Converter. n.d. 8 October 2017. <http://www.islamicity.org/hijri-gregorian-converter/?AspxAutoDetectCookieSupport=1#>.

[196] al-Tabari, Abu Jafar Muhammad b. Jarir. The History of al-Tabari - Volume 34 - Incipient Decline. Ed. Said Amir Arjomand, et al. New York: State University of New York Press, 1989. p.165.

[197] (The Economic System of the Early Islamic Period p.89) op. cit., note 55

[198] Ibid., p.90

[199] (Ma'ariful-Quran p.659, Vol. 1) op. cit., note 15

[200] (The Economic System of the Early Islamic Period p.91) op. cit., note 55

[201] (A Glossary of Islamic Terms p.12) op. cit., note 6

[202] Ibid., p.118

[203] (Ma'ariful-Quran p.408, Vol. 4) op. cit., note 15

[204] (The Economic System of the Early Islamic Period p.103-104) op. cit., note 55

[205] (English Translation Of Sunan Ibn Majah p.475, Vol.5) op. cit., note 11

[206] (The Economic System of the Early Islamic Period p.106) op. cit., note 55

[207] (English Translation of Sunan An-Nasai p.313 Vol. 3) op. cit., note 5

[208] Ibid., p.412,

[209] (The Translation Of The Meanings Of Sahih Al-Bukhari Arabic-English p202, Vol. 4) op. cit., note 4

[210] Ibid., p.281, Vol. 2

[211] BRITANNICA, The Editors of Encyclopaedia Britannica (2018). Encyclopaedia Britannica, Tithe. [online]. Last updated Feb 2016. https://www.britannica.com/topic/tithe

[212] (English Translation Of Sahih Muslim p.95 vol.1.) op. cit., note 32

[213] (English Translation of Jami At-Tirmidhi p.649-650 Vol.6) op. cit., note 1

[214] (Bullion By Post - 01 August 2016. Website. <https://www.bullionbypost.co.uk/>.)

[215] (Al-Muwatta of Imam Malik ibn Anas - Hadith 17.2.7) op. cit., note 74

[216] Ibid.,

[217] (The Economic System of the Early Islamic Period p.140) op. cit., note 55

[218] (English Translation of Jami At-Tirmidhi p.649-650 Vol.6) op. cit., note 1

[219] Ibid.,

[220] (Bullion By Post - 01 August 2016. Website. <https://www.bullionbypost.co.uk/>.)

[221] (Al-Muwatta of Imam Malik ibn Anas - Hadith 17.2.7) op. cit., note 74

[222] Ibid.,

[223] (The Economic System of the Early Islamic Period p.140) op. cit., note 55

[224] (English Translation of Jami At-Tirmidhi p.649-650 Vol.6) op. cit., note 1

[225] Ibid., p.615 vol.6.

[226] (Alibaba.com: Ajwa - 01 July 2016. Website. <https://www.alibaba.com/product-detail/Ajwa_50015452403.html?spm=a2700.7724857.0.0.2RVZo8>.)

[227] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[228] Ibid., p.140

[229] (English Translation of Jami At-Tirmidhi p.649-650 Vol.6) op. cit., note 1

[230] Ibid.,

[231] Ibid., p.97 vol.2.

[232] (English Translation of Jami At-Tirmidhi p.615, Vol.6) op. cit., note 1

[233] (Islam Freedom - 01 July 2016. Website. <http://www.islamfreedom.com/qurbani.php>)

[234] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[235] Ibid., p.140

[236] Ibid., p.100

[237] (English Translation of Jami At-Tirmidhi p.615, Vol.6) op. cit., note 1

[238] (Islam Freedom - 01 July 2016. Website. <http://www.islamfreedom.com/qurbani.php>)

[239] (The Economic System of the Early Islamic Period p.46) op. cit., note 55

[240] Ibid., p.140

[241] Ibid., p.97

[242]Central Intelligence Agency.The World Factbook: Country Comparison - GDP Per Capita (PPP). n.d. Website. 01 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html>.

[243] (The Economic System of the Early Islamic Period p.47) op. cit., note 55

[244] Ibid.,

[245] Ibid., p.140

[246] (English Translation of Jami At-Tirmidhi p.640, Vol.6) op. cit., note 1

[247] Ibid.,

[248] (Alibaba.com: Thawb Robe - Website. 06 September 2016. <https://wholesaler.alibaba.com/product-detail/Perfect-saudi-al-aseel-arabian-thobe_60478290806.html?spm=a2700.7724857.0.0.bFckwK>.)

[249] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[250] Ibid.,

[251] Ibid., p.140

[252] (eSimsar.com - 248 sq.m Villa For Sale In Ar Ranuna, Al Madinah Al Munawwarah. n.d. Website. 06 September 2016. <https://www.esimsar.com/en/villa-for-sale-al-madinah-al-munawwarah-al-madinah-al-munawwarah-34113.html>.)

[253] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[254] Ibid., p.140

[255] (BQ Magazine - USD 500 Million Are Spent On Weddings in Qatar Each Year. Ed. Dada Zecic Pivac. 01 March 2015. Website. 06 September 2016. <http://www.bq-magazine.com/industries/2015/03/wedding-industry-flourishing-gcc>.)

[256] (The Economic System of the Early Islamic Period p.48) op. cit., note 55

[257] Ibid.,

[258] Ibid., p.140

[259] Organisation of Islamic Cooperation (OIC). About: History. n.d. Website. 23 July 2016. <http://www.oic-oci.org/oicv3/page/?p_id=52&p_ref=26&lan=en>.

[260] (International Monetary Fund (IMF)) op. cit., note 98

[261] Central Intelligence Agency. The World Factbook: Population. n.d. Website. 04 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html>.

[262] Central Intelligence Agency. The World Factbook: Religions. n.d. Website. 04 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/fields/2122.html>.

[263] Central Intelligence Agency. The World Factbook: Population Below Poverty Line. n.d. Website. 04 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html>.

[264] (Central Intelligence Agency) op. cit., note 242

[265] Central Intelligence Agency. The World Factbook: Labor Force. n.d. Website. 04 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/fields/2095.html>.

[266] Central Intelligence Agency. The World Factbook: Unemployment Rate. n.d. Website. 04 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/rankorder/2129rank.html>.

[267] (Central Intelligence Agency) op. cit., note 117

[268] Central Intelligence Agency. The World Factbook - Country Comparison - GDP (PPP). n.d. Website. 24 February 2017. <https://www.cia.gov/library/Publications/the-world-factbook/rankorder/2001rank.html>.

[269] Central Intelligence Agency. The World Factbook: Country Comparison - Debt - External. n.d. Website. 04 February 2017. <https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html>.

[270] The World Bank. Net Official Development Assistance and Official Aid Received (current US$). n.d. Website. 04 February 2017. <http://databank.worldbank.org/data/reports.aspx?source=2&series=DT.ODA.ALLD.CD&country>.

[271] Organisation for Economic Cooperation & Development (OECD). Development Co-operation Report 2016: The Sustainable Development Goals as Business Opportunities. Paris: OECD Publishing, 2016. Report. 04 February 2017. <http://dx.doi.org/10.1787/dcr-2016-en>.

[272] (Central Intelligence Agency) op. cit., note 261

[273] (Central Intelligence Agency) op. cit., note 262

[274] (Central Intelligence Agency) op. cit., note 261

[275] (Central Intelligence Agency) op. cit., note 262

[276] (Central Intelligence Agency) op. cit., note 263

[277] Ibid.,

[278] (Central Intelligence Agency) op. cit., note 117

[279] (Central Intelligence Agency) op. cit., note 268

[280] (Central Intelligence Agency) op. cit., note 117

[281] (Central Intelligence Agency) op. cit., note 268

[282] (Central Intelligence Agency) op. cit., note 269

[283] Ibid.,

[284] (Central Intelligence Agency) op. cit., note 242

[285] (Central Intelligence Agency) op. cit., note 265

[286] (Central Intelligence Agency) op. cit., note 266

[287] (Central Intelligence Agency) op. cit., note 242

[288] (Central Intelligence Agency) op. cit., note 265

[289] (Central Intelligence Agency) op. cit., note 266

[290] (The World Bank) op. cit., note 270

[291] (Organisation for Economic Cooperation & Development (OECD)) op. cit., note 271

[292] (The World Bank) op. cit., note 270

[293] (Organisation for Economic Cooperation & Development (OECD)) op. cit., note 271