Discover the importance of zakat in Islam and why it is a crucial pillar of the faith. Learn how zakat purifies wealth, supports the community, and fosters solidarity.
Why Zakat is Important in Islam.
Wealth is dear to everyone but the one who spends this wealth on others attains goodness and purity. This is his real growth and goodness which he acquires by paying the obligatory contribution levied on his wealth in the form of Zakat.Zakat becomes payable only when twelve months have elapsed over the property which comes within the limit ofNisab.
Importance:
Importance of Zakat can be judged by the fact that it has been included among the five pillars of Islam. There is no doubt that is occupies a very important place in Islam, second only to prayers. I’he commandment to perform prayers in the Holy Quran is invariable followed by Zakat and with the same emphasis. In sera al-
Baqrah the Muslims are commanded to keepup prayer and pay zakat in these words.
“And keep up prayer and pay Zakat. And whatever good you send before yourself, you will find it with God.”
The payment of Zakat is described as one of the qualities of a line believer in the following words.
“Only he can maintain the mosques of God who believes in God and the last day, and keeps up prayer and pay Zakat and fears none but God.” Sura-al-Barsaat.
Zakat and Tax:
Zakat is not a tax in the real sense of the term. It is infact a form of worship or a religious duty based on entirely different psychological feelings than an ordinary tax. People hate paying taxes to the government and many times try to evade the payment or at least manage to get reduction. It is burdon on the people.
Zakat is a religious duty and is performed very zealously to seek the preasure of God by the majority of the Muslims all over the world, even if there is no official arrangement for its collection.
Zakat is considered as one of the five pillars of Islam and obviously such an important position cannot be given to any tax.
Income from taxes can be spent by the government on its multifarious requirements without any considerations for the revenue frdm any single tax. whereas in case of Zakat , the Muslim government is given special instructions by the Holy Quran.
Thus Zakat is not a tax in the ordinary sense of the word but is a special tax which is levied upon the Muslim member of the state only and is paid by them as religious duty to please God.
Economic Importance of Zakat:
Zakat is a compulsory levy which every member of the Muslim community who satisfy the necessary condition must pay it under all circumstances. The collective fund is utilized for the uplift of the less fortunate members of the community. In a way, it constitutes a co-operative society, an insurance company, a provident fund of the Muslim community. Any member of the community, who needs help is provided help from this fund. It is such an important social insurance for every member of the Muslim community that no one should ever worry about his future.
It narrow down the economic – inequality in the community to the minimum possible limit. Its purpose is to keep the economic differences among the people within just and equitable limits so that the rich may not grow richer and the poor poorer. Thus it is a religious duty of the rich members to pay zakat in order to help the poor members of the community in circulation and does not let it concentrate in few hands. Zakat seems to be a very effective method of bridging the gulf between the “haves” and the “havenotes”. It helps in narrowing down the economic difference among the people so effectively that no one is left poor or destitute in the community.
Zakat provides a very strong stimulus to the wealthy people in the community to invest their capital rather than leave it unsed and let it be finished in due course by the regular payments of the annual Zakat levy. There are two powerful factors behind the levy of Zakat which encourage the investment of capital in industrial and commercial enterpises.
Firstly, there is the psychological factor. The very fact that zakat is paid to seek the pleasure of God is enough to encourage people to use their capital as far as possible productive purposes. So that they may earn more wealth and pay more Zakat, there by earning still greater pleasure of God. This factor permeats the whole fabric of Muslim society and supplies sufficient capital to keep the wheels of trade and industry continuously running Secondly, there is the economic motive. The more you invest your capital in trade and industry, the greater profit you make. The people are thus encouraged to invest their capital rather than to hoard it.
Zakat and Tax:
Zakat is not a tax in the real sense of the term. It is infact a form of worship or a religious duty based on entirely different psychological feelings than an ordinary tax. People hate paying taxes to the government and many times try to evade the payment or at least manage to get reduction. It is burdon on the people.
Zakat is a religious duty and is performed very zealously to seek the preasure of God by the majority of the Muslims all over the world, even if there is no official arrangement for its collection.
Zakat is considered as one of the five pillars of Islam and obviously such an important position cannot be given to any tax.
Income from taxes can be spent by the government on its multifarious requirements without any considerations for the revenue frdm any single tax. whereas in case of Zakat , the Muslim government is given special instructions by the Holy Quran.
Thus Zakat is not a tax in the ordinary sense of the word but is a special tax which is levied upon the Muslim member of the state only and is paid by them as religious duty to please God.
Economic Importance of Zakat:
Zakat is a compulsory levy which every member of the Muslim community who satisfy the necessary condition must pay it under all circumstances. The collective fund is utilized for the uplift of the less fortunate members of the community. In a way, it constitutes a co-operative society, an insurance company, a provident fund of the Muslim community. Any member of the community, who needs help is provided help from this fund. It is such an important social insurance for every member of the Muslim community that no one should ever worry about his future.
It narrow down the economic – inequality in the community to the minimum possible limit. Its purpose is to keep the economic differences among the people within just and equitable limits so that the rich may not grow richer and the poor poorer. Thus it is a religious duty of the rich members to pay zakat in order to help the poor members of the community in circulation and does not let it concentrate in few hands. Zakat seems to be a very effective method of bridging the gulf between the “haves” and the “havenotes”. It helps in narrowing down the economic difference among the people so effectively that no one is left poor or destitute in the community.
Zakat provides a very strong stimulus to the wealthy people in the community to invest their capital rather than leave it unsed and let it be finished in due course by the regular payments of the annual Zakat levy. There are two powerful factors behind the levy of Zakat which encourage the investment of capital in industrial and commercial enterpises.
Firstly, there is the psychological factor. The very fact that zakat is paid to seek the pleasure of God is enough to encourage people to use their capital as far as possible productive purposes. So that they may earn more wealth and pay more Zakat, there by earning still greater pleasure of God. This factor permeats the whole fabric of Muslim society and supplies sufficient capital to keep the wheels of trade and industry continuously running Secondly, there is the economic motive. The more you invest your capital in trade and industry, the greater profit you make. The people are thus encouraged to invest their capital rather than to hoard it.
Fiscal Policy and Zakat
A fiscal system based on Zakat, involves and automatic fluctuation in state revenues in response to change in income together with appropriate combinations and permutations of other taxes q may work for an automatic stabilization of total income. In addition it may also lead fo a stable budget.
In inflationary’ conditions, the total Zakat collections would increase. As economic prosperity increases the required volume of transfer payments to the poor or unemployed may decline, thereby causing an accumulation of budget surpluses on accpunt of Zakat may be held over during these years and used when recession or depression sets in and course hardship to people.
The budgetary surplus or deficits, arising out of Zakat collection may be disbursed in a countercyclical manner or more appropriately as an element of compensatory fiscal policy.
In deflationary conditions, the total Zakat collections would decline. In inflationary condition the total Zakat collections would increase, in spite of its fixed rate. The stable tax rate combined with a variable volume of disbursement of Zakat funds in response to rise or decline in total employment in an advanced economy serves as an automatic regulator of government expenditure. This characteristic of Zakat tax in judiciously combined with similar fiscal devices is likely to work for stability without major dislocations in the economy.