Zakat and it’s Economic Benefits

March 4, 2012 General, March 2012 Leave a comment

Zakat is a form of financial worship that is obligatory upon those adult Muslims who remain in possession of a certain amount of money and other valuables/property for one year. If the rich and affluent people of Pakistan pay Zakat in line with injunctions of Islam, poverty in the country could be abolished within a few years. But for this purpose we have to restore confidence of people in state institutions.

Zakat is one of the five pillar/tenets of Islam that was made obligatory in 2 A.H. Its literal meaning is purification or growth, and according to Islam it is a form of financial worship that is obligatory upon those adult Muslims both men and women who remain in possession of a certain amount of money and other valuables/property for one year. At the end of each year they have to spend a specified portion of that amount or property in charity under particular heads and this process is called Zakat. The specified amount of money and other valuables on which Zakat becomes obligatory are known as Nisab. For gold and silver Nisab is 7-1/2 tolas of gold and 52-1/2 tolas of silver which means that if a person remains in possession of 7-1/2 tola of gold or 52-1/2 tola of silver or more for one year than at the end of year, it is obligatory upon him/her to give 2.5% of it as Zakat in charity. The Nisab of Zakat for cash amount is same that is the value of 7-1/2 tola of gold or 52-1/2 tola of silver whichever is less and 2.5% of it has to be given in charity as Zakat annually. For cattle there is a separate Nisab. For sheep and goats it is 1/40 i.e. if a person remains in possession of 40 sheep or goats for one year, at the end of year, he/she has to give one sheep or goat or amount equivalent to its value/price in charity as Zakat. For cows Nisab is one cow per 30 cows and for camels it is one goat or sheep per five camels. Zakat is also obligatory on production of land, products of factories and production of mines. For agricultural production, Nisab is 1/10 of total production, if the land is rain-watered or un-irrigated and is called Ushur. It is 1/20 of the accumulated stock of production when the land is irrigated one.

year, he/she has to give one sheep or goat or amount equivalent to its value/price in charity as Zakat. For cows Nisab is one cow per 30 cows and for camels it is one goat or sheep per five camels. Zakat is also obligatory on production of land, products of factories and production of mines. For agricultural production, Nisab is 1/10 of total production, if the land is rain-watered or un-irrigated and is called Ushur. It is 1/20 of the accumulated stock of production when the land is irrigated one.

Heads of Zakat i.e the heads under which Zakat can be given are eight that have been elaborated in verse No. 60 of Surah Al-Tawbah/ Chapter Repentance which states: ‘The alms are meant only for the Fuqara/poor and the Masakeen/ needy and for Aamileen i.e. those who are in charge thereof, those whose hearts are to be reconciled, and to free those in bondage, and to help those burdened with debt, and for expenditure in the way of Allah and for the wayfarer’. Hazarat Ibn Abbass (May Allah be pleased with him) says that Maskeen is that poor who begs for financial assistance and Faqeer is that poor who despite of poverty and financial constraints does not beg for help. As far as the head of freeing slaves is concerned, nowadays the system of slaves and concubines has become extinct, however, the amount of Zakat can be utilized for freeing those prisoners who have completed their terms of imprisonment but are languishing in jails due to inability to pay the amount of fine. Zakat can be given only to Muslims. It is also unlawful to give Zakat to those relatives who are dependent on the one who is giving Zakat such as ones parents, children, spouses etc.

If the government ensures transparency in collection and distribution of income generated under the head of Zakat, it will bring visible improvements in the standard of life of the poor. That in turn would go a long way in resolving economic woes of the country.
The Holy Quran tells us that Zakat was also obligatory upon the people of other Prophets like those of Abraham and Christ. That’s why other religions of the world also emphasis on spending wealth in charity, however, Islam is having a special distinction in this regard as it not only recommends spending one’s wealth in charity but makes it obligatory upon its well-to-do followers to give a specific portion of their wealth in charity as Zakat. The Holy Prophet (PBUH) appointed officials for the purpose of collecting Zakat. After the demise of Holy Prophet (PBUH) when some Muslim tribes refused to give Zakat, the first caliph of Islam, Hazart Abu Bakar Siddique (May Allah be pleased with him), declared Jihad/holy war against them which can be declared only against non-Muslims. This incident clearly exhibits the importance of Zakat in Islam. Islam declares that the amount spent in the way of Allah is a goodly loan (Karz-e-Hasana) given to Him and the Almighty Allah has promised many fold reward and return/reward for those who spend their wealth in charity. In this regard, the Almighty Allah says in verse No. 261 of Surah Al-Bakrah /Chapter the Cow: ‘The example of those who spend their wealth in the way of Allah is like that of a grain of corn that sprouts seven ears, and in every ear there are a hundred grains. Thus Allah multiplies the action of whomsoever He wills. Allah is Magnificent, All-Knowing’
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Unwarranted love, lust and greed/avarice for wealth are the root cause of evils and mischief on earth. Therefore, Islam wants its followers to overcome this abominable tendency through Zakat and charity. The Christ said, ‘The heart of man remains where his wealth is’, and the Holy Prophet (PBUH) said, ‘The biggest temptation/trial of my people is wealth’. Therefore, Islam abhors love for accumulation of wealth and adores spending wealth in charity and for noble causes. In this regard Allah Almighty says in verse No. 6,7 of Surah Ha Mim Al-Sajdah: ‘Woe to those who associate others with Allah in His Divinity (6) who do not pay Zakah and who deny the Hereafter (7)’ Similarly the Allah Almighty says in verse No. 195 of Surah Al-Bakrah / Chapter the Cow: ‘Spend in the way of Allah and do not cast yourselves into destruction with your own hands; do good, for Allah loves those who do good. Through the institution of Zakat, Islam prevents accumulation of wealth in few hands and promotes flow of wealth from rich to the poor which in turn goes a long way in establishing a society based on equitable distribution of wealth. Through the institution of Zakat and by outlawing interest, Islam creates an economic system which is not only free from tyrannies of capitalism and coercive standardization of communism but also halts exploitation of the oppressed. In this regard, the Allah Almighty says in verse No. 276 of Surah Al-Bakrah / Chapter the Cow: ‘Allah deprives interest of all blessing, whereas He blesses charity with growth. Allah loves none who is ungrateful and persists in sin’.
Rapidly increasing poverty is the most serious economic problem of developing countries like Pakistan, that can be controlled and slashed by bringing into place a concrete and effective system of Zakat. Various International and national surveys verify that if the rich and affluent people of Pakistan pay Zakat in line with injunctions of Islam, poverty in the country could be abolished within a few years. But for this purpose, we have to restore confidence of people in state institutions. Owing to rampant corruption, the people are reluctant to deposit their Zakat in state institution and banks as they are having serious apprehension and reservations about the integrity and efficiency of state machinery and functionaries. If the government ensures transparency in collection and distribution of income generated under the head of Zakat, it will bring visible improvements in the standard of living of the poor. That in turn would go a long way in resolving economic woes of the country.

Even at this moment of time the amount that is deducted by banks from account holders on first of Ramazan each year under the head of Zakat, is playing a commendable role in functioning of state-run charitable organizations. The government is using this amount for providing free of cost medicines and medical treatment to the destitute patient in public sector hospitals and for some other noble causes but there is room and dire need for controlling loopholes and embezzlement in the utilization of this amount so that the people may be enabled to believe that their zakat is being used accurately by the government. Apart from this, some financially stable people of Pakistan are regularly giving their Zakat and effectively spending in charity in their individual capacities.

They are supporting charitable institutions, educational institutes for poor, seminaries, orphanages etc. They contribute generously whenever the country is confronted with some natural disaster. In this way they are playing a pivotal role in generating economic activity and in improving the standard of living of down trodden and oppressed class of society. For giving impetus to this economic and beneficial activity, it is inevitable for the government to restore public confidence in state run institutions by properly and adequately managing the system of Zakat.

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