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Zakat, Tax, and Islam; Is a New Regulation Necessary?

In the previous article, I delved into the worship aspect of zakat and transitioned to its financial dimension, which concerns public finance. I concluded by noting that zakat is discussed in our jurisprudence books not only as a form of worship but also under headings like “wealth, tribute, and sovereign decrees,” indicating it encompasses the relationship between the state and its citizens. Let me continue.

When we consider the Quranic verses and hadiths detailing the collection and allocation of zakat as a whole, we can infer that it is much more than a personal act of worship; it is a public duty. This conclusion does not require one to be an Islamic scholar or an economist, especially when considering the practices from the Prophet Muhammad’s (pbuh) time, which solidify this interpretation in our minds.

Therefore, we can state that zakat in Islam is not merely an individual act of worship but also a public duty or obligation. If we were to use a modern term, zakat is synonymous with tax, though its aspect of worship is always preserved.

However, looking at the practical applications of zakat in Islamic societies and states from the time after the Prophet Muhammad’s (pbuh) death to the present, we encounter a different situation. During the caliphates of Abu Bakr, Umar, and to some extent in the early period of Uthman, the collection and allocation of zakat were fully managed by the state as an element of public finance.

As mentioned in Surah At-Tawbah, verse 60, zakat collectors – akin to tax officers today – would travel from village to village, town to town, collecting zakat and transporting it to the state treasury in Medina. These funds and goods, forming the central budget, were then allocated by the state leader and authorized individuals as deemed necessary.

However, during the later part of Uthman’s reign, changes were made regarding the collection of zakat. He maintained the previous practices regarding who should pay zakat, which assets were subject to zakat, and the rates, but made partial changes to the collection process. Distinguishing between “apparent” and “hidden” assets, Uthman mandated that zakat on apparent assets be collected and added to the central budget by zakat collectors, while leaving the zakat on hidden assets, such as jewelry, to the individuals’ conscience, to be distributed to the needy, poor, debtors, slaves, etc., within their communities.

The significant point here is that even 15 years after the Prophet’s death, this change, driven by evolving socio-economic, political, and cultural contexts, did not alter the criteria for zakatable assets, rates, or the definition of who is considered wealthy. These remained unchanged, treated as divine ordinances, and closed to reinterpretation. Yet, considering the shift towards distinguishing between apparent and hidden assets for collection purposes, similar adjustments could and should have been made to other aspects, especially since the socio-economic landscape has dramatically changed over 14 centuries.

Indeed, the need for change is evident today as the criteria set for zakatable assets no longer ensure socio-economic justice. For instance, the wealth thresholds established during the Prophet’s time have remained unchanged, despite significant shifts in the economic value of these assets due to evolving socio-economic conditions.

Experts indicate that today’s value difference between gold and silver is approximately 1/60, whereas it was about 1/7 during the Prophet’s time. Hence, someone with 595 grams of silver would be considered wealthy if gold is the benchmark, but poor if silver is used, a discrepancy that defies rational acceptance.

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Dr. Ahmet Kurucan is a an author and scholar focusing on Islamic Studies and Law.


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