Importance of paying zakat

ISLAM regards all wealth as belonging to God and thus an “amanah” (a trust that is entrusted to the individual) from Allah. We will have to account for the wealth that Allah has entrusted to us in the hereafter.

One may accumulate as much wealth as one pleases, as long as such means do not violate the law of moral. Wealth-gathering is a legitimate activity as long as it does not entail theft, cheating, coercion, riba (usury), or harming of others.

Indeed, the pursuit of wealth is one of man’s primal concerns and demands for survival (consisting of food, shelter and clothing). Wealth-gathering is vital for living, but it must be subject to the law of moral. Without the law of moral, human life sinks to the level of being oriented around money and could lead to moral decadence.

Even if the law of moral has been strictly observed in every step of the process of acquiring wealth, our wealth requires justification on another level, that is, the institution of wealth-sharing or zakat. One of the tenets of Islam is that wealth, once acquired, ought to be shared with others in the same proportion. This is the requirement of charity and it is as old as humanity and always regarded as high moral value.

Thus, Islam seeks to preserve charity as a critical element of moral values, which must be highlighted. The purposes of zakat are:

* To purify the physical well-being and the soul of man by inhibiting selfishness and materialism from taking root in the heart of the rich, as well as spiritual training in one to create a noble, good and caring person, to others.

* To hinder jealousy and uneasiness among the poor and needy towards the rich as a hadith had mentioned: “Once you have settled the zakat upon your property, then you had put away the evil that might have risen from it.” (Narrated by Al-Hakim)

* To convince the wealthy that the title to their wealth is mitigated by the title of their fellow humans to life and subsistence.

* To assure the needy that their fellow brothers will not passively see them suffer misfortune.

* To take care of the unfortunate members of society and build their personality to become a useful contributor to society. This will cleanse unwanted feelings in them that lead to despair and an unproductive life. The Prophet said: “Men are like the organs of a body, when the organ suffers, the whole body responds to repel the cause of suffering.” (Narrated by Muslim).

Being a form of tax on wealth, zakat is incumbent on all liquid, existing, movable and immovable properties belonging to Muslims. It does not matter whether the owner is a child (for example, it is when he or she holds an inheritance wealth, zakat is obligatory on the wealth, and any of their close relatives could pay the zakat on their behalf) or adult, male or female. Three principles govern the Zakah tariff:

* No zakat is due on property intended for consumption, such as houses, gardens, clothing, or furniture. No zakat is due on jewellery of gold and silver. Taxable property is that which is intended for production, whether industrial, agricultural or commercial.

According to the Malaysian standard, even though jewellery, which is used by women, will not be imposed zakat, one must bear in mind that if a woman wears jewellery costing more than RM5,000, that is, a normal standard usage of jewelleries for a woman in Malaysia, she has to pay zakat (2.5 per cent) on the additional amount which is above the standard.

* Zakat is not an indiscriminate tax on all properties. Assessment of zakat must take into consideration the net income produced by the property in question. If in a year, the company suffers a loss, no zakat is levied on the property concerned.

* A reasonable amount necessary for the owner and his dependents’ subsistence must be deducted from the assessment.

Today, one may also ask: “Do we have to pay zakat on stocks that we keep as savings?”

Shares that Muslims are allowed to buy and own may be purchased to be held and for dividends, participate in the management of the company, or for use as tradable objects waiting for the opportunity to realise capital gains and sell. In this case, one is to pay zakat at the same rate and net asset value on the due date of the zakat.

Holding shares for their dividends are usually for the long term, during which capital gains may also be realised but the owner will usually keeps holding them for longer periods.

There are three views on the zakat in this case:

* The view of the majority, which came in a resolution of the OIC (Organisation of Islamic Countries) Fiqh Academy which maintains that one has to calculate the portion of zakat zakah based on the value of the stock, from the company’s balance sheet and pay zakat on it on the due date at the rate of 2.5 per cent. The zakah portion is: cash + receivables + inventories of goods in process and ready for sale minus short-term debts.

* The minority view which states that this investment is similar to trading in stocks from the Syariah perspective of the word. Accordingly, the owner has to pay zakat at the rate of 2.5 per cent on the market value on the due date.

* The third view is a sub-set of the first one. It actually adds on to the first one that if it is difficult to calculate zakat from the balance sheet, one may pay 10 per cent on the net income of the stock as in analogy with agriculture. Actually, there is no strong and logical support in Syariah for this opinion.

In conclusion, Muslim must bear in mind that their reluctance to pay zakat will only result in appalling consequences, either spiritually or physically such as:

* Losing Allah’s blessings over his/her property.

* Increasing the greediness in oneself to collect and accumulate as much wealth as one could without regard for the legitimacy of the sources of income in the eyes of Islam.

* Widening the gap between the rich and the poor. In this case, the rich becomes richer and the poor remains poor or becomes even poorer without any help to improve their situation. As a result, this leads to social illnesses and civil crimes, which will pose a risk to the harmony and tranquility of life in society.

* The existence of envy and hatred between the rich and the poor.

* The wealth, which has not been purified with zakat, will bring disasters to its owner in the hereafter.

Ramadhan al-Mubarak is, thus, a perfect time to be reminded of the duty to pay “Zakat al-Fitr”, which is obligatory to all Muslim men, women, young and old.

Accordingly, cash value of one ‘saa’ (or one ‘gantang’ or 2.3 kg) can be paid as “Zakat al-Fitr” and it is equivalent to a very small amount of money (below RM5). It must be settled before the Idul Fitr sunnah prayer is performed. In the event it is settled later than the Idul Fitr sunnah prayer, it will not be regarded as Zakat Fitrah but will merely be regarded as an ordinary sadaqah. Therefore, Muslims should not hesitate in carrying out this duty before it is due as it will also help to enlighten the Hari Raya celebration of the unfortunate members in society.

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