BLOG OF KNOWLEDGE (Shari'ah, Law, Islamic Finance and Muslim News)
Shari'ah, Law, Islamic Finance and Muslim News
February 11, 2014
DR. ZULKIFLI HASAN
MEMAHAMI KONSEP “SUMPAH” DALAM ISLAM
MEMAHAMI KONSEP “SUMPAH” DALAM ISLAM
Oleh Zulkifli Hasan
1.0	Pendahuluan
Mutakhir ini, masyarakat dihidangkan dengan pelbagai isu agama yang sememangnya perlu difahami secara ilmiah, jujur, ikhlas dan tepat menurut kehendak syarak. Di antara isu yang menjadi topik hangat perbincangan umum pada hari ini ialah tentang konsep sumpah atau al-Yamin di dalam Islam. Apabila berlakunya sesuatu kes yang melibatkan pertuduhan dan perselisihan, maka kerap kali sumpah menjadi sebutan dan mainan. Di dalam kes pertuduhan liwat misalnya, ramai yang membuat andaian bahawa Yang Menuduh dan Orang Kena Tuduh perlu mengangkat sumpah bagi menyelesaikan kes. Dengan itu berlakulah upacara angkat sumpah di dalam masjid dihadapan al-Quran dan mendapat liputan secara langsung di media. Begitu juga dalam kes video seks yang menggemparkan Malaysia, di mana ramai pihak menuntut Orang Kena Tuduh untuk bersumpah dan beranggapan ianya perlu dan wajib dilakukan. Kes terkini merujuk kepada pasukan bolasepak T-Team yang melaksanakan upacara sumpah di depan al Quran berkenaan dengan insiden pergaduhan di stadium Larkin Johor. Begitu juga dengan kes-kes lain yang melibatkan pihak sesuka hati bersumpah malahan dilaksanakan dengan menjunjung al Quran.
Melihat kepada perihal ketidak atau kurang fahaman umum mengenai konsep sumpah dalam Islam, penulis ingin berkongsi sedikit pengetahuan berkenaan dengan ruanglingkup undang-undang Islam terhadap perlaksanaan sumpah dan aplikasinya. Dengan informasi dan penjelasan yang diberikan, diharapkan selepas ini tiada lagi desakan dari pihak tertentu untuk sesuka hati meminta sesiapa bersumpah. Sesungguhnya hanya ilmu pengetahuan dan kejujuran serta keihklasan dalam memahami konsep sumpah ini akan memelihara masyarakat dari pelbagai mehnah dan tohmahan.
2.0	Konsep Sumpah (Al-Yamin) dan Pembahagian
Menurut bahasa al-yamīn bermaksud kanan atau bahagian kanan, dan di dalam bahasa melayu al-yamīn bererti sumpah. Istilah lain yang digunapakai juga merujuk kepada al-yamīn ialah al-halaf, al-istihlaf, al-Ila’ dan al-qasam. Dari sudut istilah pula, al-yamīn ditakrifkan sebagai: “Suatu lafaz yang digunakan untuk menyatakan (mensabitkan) haknya terhadap sesuatu perkara atau menafikan sesuatu perkara dengan menyebut nama Allah S.W.T atau sifat-sifatNya”. Melalui pentakrifan ini, sumpah yang dibuat dengan memegang atau menjunjung al-Quran di mana sering kali menjadi anggapan ramai sebagai syariat Islam bukanlah amalan yang dituntut oleh syarak.
Bagi memahami konsep sumpah dengan lebih mendalam, kefahaman terhadap pembahagiannya adalah amat penting. Secara umumnya sumpah dibahagikan dua bahagian iaitu di luar mahkamah (al-Yamīn ghair al-Qadha’iyyah) dan dalam mahkamah (al-Yamīn al-Qadha’iyyah). Walaupun kedua-dua al-yamīn bertujuan untuk menguat dan mengukuh sesuatu tetapi terdapat beberapa perbezaan dari segi hukum dan kaedah pemakaiannya. Al Yamin di luar mahkamah adalah tidak tergolong dalam kategori pembuktian yang diterima untuk sabitan apa-apa kes. Manakala al-Yamin di dalam mahkamah menjadi keterangan (al-Bayyinah) dan boleh diterima pakai untuk sabitan di dalam kes mal (sivil) sahaja. Apa-apa bentuk al-Yamin atau sumpah di dalam kes-kes yang melibatkan jenayah seperti hudud, qisas dan taa’zir tidak boleh diterima pakai sebagai pembuktian untuk sabitan.
2.1	Al-Yamīn Di luar Mahkamah (al-Yamīn Ghair al-Qadha’iyyah)
Al-Yamīn di luar mahkamah juga bertujuan untuk menguat dan mengukuhkan sesuatu perkara. Tetapi al-yamīn ini tidaklah menjadi salah satu cara pembuktian berbeza dengan al-yamīn di dalam mahkamah. al-Yamīn ghair al-Qadha’iyyah bergantung sepenuhnya kepada niat yang orang melafazkannya, sekiranya lafaznya berbeza dari apa yang diniatkannya ia disebut sebagai ‘Tauriyyah’. Tauriah semasa bersumpah adalah tidak dibenarkan samasekali sekira bertujuan untuk menganiayai orang lain bahkan ia merupakan perbuatan yang diharamkan. Pembahagian al-yamīn di luar mahkamah boleh dibahagikan kepada empat iaitu al-yamīn al-munaqidah, al-yamīn al-lagha, al-yamīn al-ghumus dan al-Yamin Mubahalah.
Al-Yamīn al-Mun’aqidah.
Al-yamīn al-Munaqidah iaitu sumpah yang bersungguh-sungguh dan sah. Ia merupakan suatu sumpah terhadap sesuatu perkara pada masa yang akan datang sama ada untuk dilaksanakan atau meninggalkan sesuatu perkara. Sekiranya seseorang itu melanggar apa yang disumpahkannya maka wajib dikenakan kafarah.
Al-Yamīn al-Lagha
Al-Yamīn al-Lagha adalah jenis sumpah sia-sia yang mana orang yang melafazkan sumpah tersebut tidak berniat untuk bersumpah. Ianya juga boleh ditakrifkan sebagai sumpah terhadap sesuatu yang tidak disangkakan menepati ianya bersumpah sebagaimana ia bersumpah akan tetapi ternyata tidak tepat atau dalam erti kata lain sumpah yang dimaksudkan dengan sesuatu tetapi lidah menyebut perkataan lain. Para fuqaha berpendapat bahawa sumpah jenis ini tidak dikenakan kafarat kepada sesiapa yang melanggarnya.
Al-Yamīn al-Ghumus
Al-Yamīn al-Ghumus ialah sumpah bohong yang merendahkan hak-hak atau bertujuan membuat dosa dan khianat serta ia tergolong di antara dosa-dosa besar. Ghumus itu bermaksud menjerumuskan pelakunya ke dalam neraka. Mengikut pendapat mazhab Shafie diwajibkan juga kafarat kepada sumpah bohong ini.
Al-Yamin al-Mubahalah
Al-Yamin al-mubahalah ialah sumpah saling melaknat sesiapa yang berbohong antara kedua-dua belah pihak, termasuk orang yang bersumpah. Di antara perkara yang perlu diberi perhatian pada sumpah mubahalah ialah ianya adalah bentuk sumpah di luar mahkamah yang berlaku untuk mempertahankan diri dan bukan untuk melakukan tuduhan kepada orang lain. Sekiranya apa yang disumpah tidak betul, sesuatu yang batil atau berbohong orang yang bersumpah juga termasuk dalam mereka yang dilaknat dalam sumpahan itu. Perlu diingat keperluan kepada al-Yamin mubahalah tidak menjadi tuntutan sekiranya kes sedang dibicarakan di Mahkamah. Ini kerana ianya boleh mengganggu proses keadilan di Mahkamah yang melibatkan banyak kaedah pembuktian yang lain seperti al-Iqrar, al-Syahadah dan al-Qarinah. Malahan sumpah mubahalah dianjurkan hanya selepas pelbagai cara diusahakan untuk menyelesaikan perbalahan dan sekiranya terus buntu barulah ianya boleh dilaksanakan. Sheikh Yusuf al-Qaradhawi mengingatkan bahawa mubahalah bukanlah perkara yang baik dan mudah dilakukan begitu sahaja, sebaliknya ia berlaku dalam perkara-perkara yang sangat penting dalam agama sahaja.
2.2	Al-Yamīn Di Dalam Mahkamah (al-Yamīn al-Qadhaiyyah)
Al-yamīn al-Qadhaiyyah berfungsi untuk mensabitkan atau menafikan sesuatu dakwaan ke atas seseorang dan ia bergantung kepada niat orang yang mengarahnya iaitu Hakim. Ianya hanya terpakai untuk sabitan dalam kes mal. Menurut kitab-kitab fiqh, al-yamīn yang dilaksanakan dalam sesuatu penghakiman terbahagi kepada tiga bahagian iaitu Yamīn al-Mudda’a ‘alaih, Yamīn al-Mudda’i dan Yamīn al-Syahid.
Yamīn al-Mudda’a alaih
Yamīn al-Mudda’a alaih ialah sumpah yang dilafazkan oleh yang kena dakwa atas arahan hakim merujuk kepada permohonan yang mendakwa bagi menguatkan jawapan terhadap dakwaan. Ia juga dikenali sebagai Yamīn al-Asliyyah, Yamīn al-Dafī’ah dan Yamīn Al-Rafī’ah. Ulamak Hanafiyyah juga menamakan sebagai sumpah wajib (Yamīn al-Wajibah).
Yamīn al-Shahid
Yamīn al-Shahid akan dilaksanakan oleh saksi sebelum sesuatu kesaksian dibuat. Sumpah ini bertujuan memberi kebenaran atas kepercayaan. Pada Masa ini al-yamīn jenis ini menjadi ganti kepada tazkiah kepada saksi.
Yamīn al-Mudda’i
Imam Abu Hanifah dan sahabat-sahabatnya hanya menerima Yamīn al-Mudda’a alaih (sumpah yang didakwa) dan menolak selain daripada itu. Namun jumhur yang terdiri daripada Maliki, Shafie, Hanbali dan lain-lain menerima pakai yamīn al-Mudda’i. Menurut para ulamak yang menerima Yamīn al-Mudda’i, ia terbahagi kepada tiga bahagian iaitu Yamīn al-Jalibah, Yamīn al-Tuhmah dan Yamīn al-Istizhar.
i. Yamīn al-Jalibah: Sumpah yang dilaksanakan oleh al-mudda’i untuk mensabitkan hak-haknya. Sebab-sebab yang memerlukan sumpah ini adakala ianya keterangan seorang saksi sahaja iaitu sumpah bersama seorang saksi (al-yamīn ma’a al-Syahid) adakalanya kerana nukul al-mudda’a alaih daripada al-Yamīn al-asliyyah dan dikembalikan kepada al-mudda’i supaya bersumpah atau dinamakan al-yamīn al-Mardudah atau al-Munqalibah. Adakalanya al-yamīn al-Jalibah digunakan kerana lauth iaitu yamīn al-Qasamah dalam kes pembunuhan atau kecederaan. Kadangkala ia juga dilaksanakan kerana Qazaf suami terhadap isterinya iaitu dikenali sebagai al-Yamīn al-Li’an dan adakalanya amanah kerana setiap orang yang diberi amanah dan mendakwa telah memulangkan barang tersebut kepada tuannya. Maka dibenarkan dakwaannya dengan bersumpah kecuali pemegang barang gadai, penyewa dan peminjam tidak dibenarkan dakwaan mereka melainkan jika ada bayyinah.
ii. al-Yamīn al-Tuhmah: Sumpah yang diarah oleh Hakim kepada orang yang mendakwa bertujuan untuk menolak dakwaan yang tidak dapat dipastikan kebenarannya. Sumpah ini diterima pakai oleh mazhab Maliki dan Zaidiyyah.
iii. Yamīn al-Istizhar: Bentuk sumpah ini yang paling kerap digunakan dalam menyelesaikan sesuatu pertikaian di mahkamah Syariah. Yamīn al-Istizhar juga disebut sebagai Yamīn al-Istithaq atau Yamīn al-Istibra’ iaitu sumpah yang dilakukan oleh orang yang mendakwa atas permintaan hakim untuk menolak tohmah terhadapnya selepas ia mengemukakan dalil dan keterangan yang diperlukan dalam dakwaan. Lazimnya Yamīn al-Istizhar ini dilaksanakan bagi tuntutan yang berhubung dengan hak ke atas orang yang ghaib atau mati.
4.0	Kesimpulan
Konsep sumpah di dalam Islam merupakan salah satu cabang ilmu yang perlu difahami secara mendalam oleh pengamal undang-undang manakala kesedaran dan kefahaman asas pada konsep ini perlu diserap dan diperjelaskan kepada masyarakat. Akibat dari ketidak atau kurang fahaman atau buat-buat tak faham pada konsep sumpah ini membuatkan ketidakselesaan dan persengketaan di dalam masyarakat. Desakan pihak tertentu untuk bersumpah dalam pelbagai aspek menunjukkan krisis intelektual dan kedangkalan tahap kefahaman Islam. Kini sumpah juga diheret dalam kancah bolasepak negara. Begitu jelas ketidakfahaman dan tahap kesedaran masyarakat mengenai konsep sumpah ini.
Sumpah yang boleh diterima pakai untuk sabitan kes adalah sumpah yang dibuat di mahkamah dan menurut syarat-syarat yang ditetapkan. Sumpah sebagai kaedah pembuktian hanya terpakai di dalam kes mal dan ianya tidak boleh diterima di dalam kes jenayah seperti kes liwat, zina, qazaf dan sebagainya. Sumpah di luar mahkamah bukanlah sesuatu perkara yang digalakkan di dalam Islam. Sumpah mubahalah misalnya, bukanlah boleh dilaksanakan sesuka hati sesedap rasa. Ianya hanya boleh dilakukan sekiranya pelbagai cara lain telah dilaksanakan dan tiada kaedah lain lagi yang boleh menyelesaikan perselisihan. Dalam aspek kaedah bersumpah pula, amalan bersumpah menjunjung atau mencium atau mengusap atau mengangkat al-Quran bukanlah tuntutan ajaran Islam. Sumpah cukup dengan menyebut nama Allah S.W.T atau sifat-sifatNya.
Penjelasan ringkas mengenai konsep sumpah di atas diharapkan dapat merungkai dan memberi kefahaman yang sewajarnya terhadap ruanglingkup dan aplikasi sumpah menurut hukum syarak. Masyarakat umum atau pihak tertentu janganlah terlalu teruja dan terkinja untuk mendesak individu untuk bersumpah sebagai kaedah menyelesaikan pertikaian dan perselisihan. Sumpah yang menyandarkan kepada nama Allah Subhanahuwataala atau sifat-sifatNya tidak boleh dipermain-mainkan dalam bentuk apa sekalipun. Amalan mendesak atau memaksa individu bersumpah di dalam masyarakat perlu dihentikan atau kita akan hanya terus mengamalkan perkara yang tidak dituntut oleh syarak malahan boleh mencetuskan kemurkaan Allah Subnahuwataala.
Best Regards

ZULKIFLI HASAN
Muscat, Oman
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One thought on “MEMAHAMI KONSEP “SUMPAH” DALAM ISLAM”
Syamsulfaiz says:
February 18, 2014 at 3:39 am

Terima kasih Zul atas penulisan artikel sumpah ni. Ilmu yang berguna.

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Issues in Fiqh al-Zakat : Implications for Islamic

Banking and Finance

Assoc. Prof. Dr. Sayed Sikandar Shah

Dept. of Fiqh and Usul al-Fiqh
Kulliyyah of Islamic Revealed Knowledge and Human Sciences (KIRKHS)

International Islamic University Malaysia
P.O Box 10 50728, Kuala Lumpur Malaysia

haneef75@yahoo.com

ABSTRACT

Zakat in terms of socio-economic role  provides  a fundamental framework for bringing
about  structural transformation  in the Islamic frame of financing .It  meets this goal by
making it a  mandatory duty on the well to do members of the Ummah ,as defined by
Islamic jurisprudence ,  to part with a portion of their wealth for the productive use  of
the  needy and other eligible  social causes .  To practically implement this policy
,Islamic law  provides us with  a  legal structure which was founded by the Prophet and
subsequently articulated in details by Muslim jurists -both classical and contemporary.
Nevertheless ,one when  surveying  the evolution of the law in this area, will be  faced
with the daunting challenge of  bridging the gap between the classical fiqh and
contemporary legal needs and questions. A host of issues are subject of academic debate
today  including , determination of nisab(exemption limit) , the bases of zakatablity  , the
productive durable use of zakat fund for the deserving recipients and other incidental
issues .Other pertinent questions in the context of Islamic banking and finance revolve
around   the implications of fiqhi  issues on zakat for a  bank as zakat  paying institution
as well as  a   financing entity of  the zakat fund .  No doubt, there are huge literatures
brilliantly postulating these issues .However, to revisit these issues with the idea of
synthesizing   and specifically linking them with Islamic banking and finance needs to be
further explored .Accordingly, this paper proposes to be an attempt towards that end.

 1

mailto:haneef75@yahoo.com

Introduction

Since early 20th century , some leading scholars have been fervently debating the
possibility of making fresh ijtihad on a host of newly emerging issues of fiqh al-
zakat.This is due to radical changes that have taken place  in the methods of producing
new forms of wealth and the way that Muslims deals even with the traditionally
designated zakat payable wealth .There are many issues1 that have engaged serious
scholarly debate surrounding the fiqh of zakat .But  for the purpose of this paper ,we ,first
,briefly highlight  the current debate about   issues ,such as the adequacy of growth as the
criterion for  zakatablity of the wealth; contemporary definition of  nisab; attempts at
revising the rate of zakat ,calculation of the  hawl ;  and exemptible assets of  the zakat
payer.Next  we focus on the  most important aspect of  utilization of zakat fund in
financing .To this end ,therefore ,we first delineate  a brief outline of the classical fiqhi
position on these issues ,as  covered by al-Qaradawi and next ,we look at the
contemporary debate surrounding them and lastly we discuss  their implications for
Islamic banking and finance .

Theoretical foundation of zakat

Zakat 2literally means to grow and to increase and to purify .When it is said about a
person,zaka nafsahu, it means to have  improved himself and have  become a better
person3 .According to Ibn Taymiyyah it implies the idea of making the soul of the zakat
payer better(morally and spiritually) and his wealth clean4.This is succinctly clear from
the declared ratio legis of zakat commandment according  to the Holy Qur`an ,``take
zakat from their wealth to purify and cleanse them.5``

Technically it stands for an act of monetary worship according to which any Muslim who
possesses a wealth(mal) equal to or exceeding a laid down limit (nisab) has to give away(
in person or through (proxy), at the prescribed rate, a portion of it to specifically
designated categories of people.6

1 Abu Al-Hasan Sadeq ,A Survey of The Institution Of Zakah: Issues, Theories And Administration(Riyad
: Islamic Development Bank Islamic Research And Training Institute ,2004),Discussion Paper II,p.29
2 It is to be remembered that Qur`an also  uses the word sadaqah to imply zakat ,for instance ,see al-A`raf :
156,Maryam :31,al-Anbiya : 72 ,al-Mu`minun : 4. Similarly ,the Prophet when dispatched Mu`adh to
Yemen,said: ``inform them that Allah  has prescribed sadaqah on their funds…`. Nevertheless  ,it was later
on that the jurists technically distinguished between sadqah and zakat,the former refers to donation and
voluntary charity while the later signifies compulsory financial obligation of the wealthy towards the poor.
See Yusuf al-Qaradawi ,Fiqh az-Zakat,Monzer Kahf(trns.),(London : Dar al Taqwa Ltd,1999),pp.xlv-
xlvi.See also Muhammad Abu-Saud ,Contemporary  Zakat(Cincinnati: Zakat and Research
Foundation,1988),pp.9-12
3 Ibid .,p.xliii.
4 Ibn Taymiyyah ,Fatawa,vol.25,p.8
5 Al-Tawbah  :103
6 Wahbah al-Zuhayli,al-Fiqh al-Islami wa Adillatuhu(Beirut : Dar al-Fikr,1989)vol.2,p.730.

 2

Zakat as such  derives its validity from numerous  verses of the the Qur`an and the
prophetic traditions ,among which ,the following are most  explicit  .The Qur`an7 ,among
others ,provides :

- And they were commanded not, but that they should worship none but Allah alone
and perform the salah and give zakah, and that is the right religion8

- ... and in their wealth and of possessions is assigned a right for the needy and

those who suffer deprivation9

- O Muhammad ;take out of their possessions sadqat so that you may cleans and
purify them thereby , and pray for them).10

The substance of the Qur`anic ayat are affirmed by many  hadith (ahadith)11 of the
Prophet:

Islam is based on five principles :`` to testify that there is no god but Allah and that
Muhammad is His Prophet, to offer the regular prayers , to pay zakah, perform hajjand
to observe the fast.``12

The Prophet sent Mu`adh to Yemen and told him,'' You are going to people of a Divine
Book . First of all invite them to worship Allah (alone) and when they come to know Allah
, inform them that Allah has enjoined on them five prayers in every day and night , and
when they start offering these prayers , inform them that Allah has enjoined on them
zakah which is to be taken from the rich among them and given to the poor among them.
And if they obey you that , take zakah from them and do not take the best of their
possessions.13

Accordingly, zakah  like other pillars of Islam is another fundamental `ibadah without
whose fulfillment one`s claim of  loyalty to Islam will be seriously doubted and even
negated .That is why  Abu Bakr ,the righteous Caliph , resolved to fight those who defied
paying it ,contending, among others ,that any one who discriminate between the two
pillars of salah and zakat ,by doing the former and willfully rejecting the other ,it would

7 The word zakat occurs thirty times in the Qur`an and in twenty –seven of them it is mentioned side by
side with salah.for details see, al-Qaradawi ,Fiqh az-Zakat,pp.9-22.
8 al-Bayyinah :5
9 al-Dhariyat : 19
10 al-Tawbah : 103
11 Hadith the plural of which is ahadith means relayed information about the Prophet`s ,statements
,practices and tradition which may either  contain a legislation  or  it may just relate the Prophet`s
undertaking as administrator .In Islamic jurisprudence , the import of the hadith as such is called
Sunnah,which is the second primary source of the hukm (law/rule) in Islam.
12 Mishkat al-Masabih ,vol1,p.96
13 Sunan Ibn Majah ,p.416

 3

be legitimate to be fought against14. The Prophet is also reported to have said:`` He who
pays it seeking the reward from Allah will be rewarded and he who refuses to pay it ,we
shall take it from him ….``15

The rationale for such stern position of the Shari`ah about enforcement of zakat is that it
,aside from being spiritually invigorating ,is designed to serve the following socio-
economic objectives :

1. to  promotes economic growth and productivity through the circulation of wealth -
zakat stimulates economic growth in the sense that it either enables the poor and
the needy to become economically productive or  helps the state to channel the
zakat fund to fund raising business sectors with the view of creating job
opportunities for the needy and the jobless. 16

2. to  meet the consumption demand of the poor thereby enhancing their purchasing
power for goods and services

3. to check the tendency for hoarding the idle money ,hence leads to production of
goods ad service

4. to finance projects such as education ,medical care and social welfare  again
raising productivity of the poor. 17

5. to  ensure equitable distribution of wealth through this means. Islam by instituting
zakat aims at forestalling the creation of unnecessary unjust gap between the
living standard of the poor and the rich ,thus avoiding the most serious malady
that afflicts the capitalists society .18Accordingly it serves as a basic system for
implementation of socio-economic justice of Islam by which a certain portion of
the income is transferred from the haves to the have-nots.19

Some Fiqhi issues: classical model

1. The Criterion of zakatability

The classical jurists by looking at the  application of zakat on the traditional sources of
wealth ,tried to identify  the raison de`tre of zakatability of wealth . On  the the principle
of induction based the Prophet`s designation of zakat payable wealth20  ,they, hence
concluded that  growth (nama) is bases of zakatability . Nama in Islamic legal parlance

14 This he said in response to `Umar`s objection to such a policy .For details see Mustafa al-Khin et. All,al-
Fiqh al-Manhaji(Beirut :Dar al-Qalam,1996),pp.274-275.
15 Al-Bayhaqi ,al-Sunan al-Kubra ,vol.4,p.105.
16 Ibid.,pp.41-42.
17 Imtiazi et all (edits),Management of Zakat in Modern Muslim Society ,(Riyad : IDB,IRTI ,2000),p.11.
18 al-Zuhayli,al-Fiqh al-Islami wa Adillatuhu vol.2,,p.372.
19 Monzer Kahf ,``Zakat : Unresolved Issues in Contemporary Fiqh``, in Development  and Finance in
Islam ,Sadeq et all(edits.)(International Islamic University Press ,1991),p.174.
20 The Prophet imposed zakat on certain heads of livestock  other than those for work .He also declared
business assets and idle money as zakatable.He also imposed zakat on  certain types  of agricultural crops
,minerals and treasure troves .The classical jurists thus theorized  that these implementations lead us to only
one  conclusion and that is ,`` only naturally growing or potentially growing wealth are subject to  zakat.``
See   Sunan Ibn Majah ,pp.416-422; Mishkat al-Masabih ,vol.2 ,pp.55-56; al-Qaradawi ,Fiqh az-
Zakat,pp.77-81

 4

refers to :First, something that provides the owner with profit or benefit. Second,
something which is the result of growth in the form of  surplus or a newly acquired
item21.For instance , profit in business is a kind of growth out of investment ,livestock
reproduction is another form of  newly acquired asset. In these two examples money
before investment has potential to grow ,and animal naturally reproduces offspring .That
is why they are considered zakat payable assets. Accordingly, and made it a condition
that any  asset to be liable to zakat ,it must either be actually growing or have the
potential for growth.
For instance, al-Kasani is quoted to have reasoned  :`` The meaning of zakat is growth
and growth does not happen except when there is growing wealth.We do not mean by this
that wealth automatically grows per se.But we mean that such wealth is susceptible to
growth by some means such as grazing and trading.Grazing is the cause of having milk
,reproduction and meat .Trading is the cause of realizing profits .In this context the cause
substitutes the effect and the judgment is attributed to the cause ….22``  One of the
implication of such a view in the filed of corporate sector is that zakat would be on the
circulating wealth and not on the fixed assets of the company.

It is  rational because ,``Zakat is legislated to help and relieve the poor without
impoverishing the rich ,by having the rich pay from their surplus ,taking a little from the
plenty.Imposing zakat on wealth that does not , by definition grow ,reverses this purpose
,since zakat is paid year after year , in addition to living expenses.``23

In line with the above theory, the jurists ruled:

i. Assets held for personal and family use ,such as household furniture and
transportation  are not subject to zakat

ii. Assets that do not grow ,such as bad debts are also not subject to zakat.But idle
money is subject to zakat because it is the fault of the owner who is lax in
investing it which robs it of its potential to grow.24

iii. All growing assets , according to the preponderant view of among jurists  except
with the Zahiiyyah ,are subject to zakat .25

2. Legal -threshold for Zakat(nisab)

 It is agreed by the majority of the classical  jurists that there is no zakat on all growing
wealth but those reaching the minimum laid down limit as set by the Sunnah (nisab).The
Prophet is on record to have exempted anything that is less than five camels, forty
sheep,two hundred silver dirhams or five wasqs of grain .Abu Hanifah ,on the  other hand
,do not regard this to be a pre-requisite in the case of land crops, fruits and minerals.

21 Al-Qaradawi ,Ibid ,,p.76.see also Ibid,pp.66-72.
22 Ibid , p.77
23 This is opined by Ibn al-Humam,the author of  Fath al-Qadir ,cited in Ibid .
24 Ibid.,pp.80-81.
25  For details see ibid ,pp.82-83

 5

Nevertheless , the majority opinions is more rational as it would be imprudent to impose
zakat on  who are themselves in need of help.26

3. The ratio of zakat

It to be noted that once the above properties reach nisab, they will subjected to four types
of rates27:

i. 2.5% from the capital income
ii. 10% or 5% from the land crops
iii. according to detailed code of rates for livestock
iv. 20% of the found treasures

As to why not a flat rate for all the zakatable assets ? Ibn Taymiyyah rationalizes by
saying that the ratio of zakat has to vary for the above types of wealth due to no or less
involvement of human effort in acquiring them28.

4. The Passage of a year  over possession of the asset

According to majority of the jurist ,twelve full lunar months should pass over the
possession of  zakat payable asset from the beginning of its ownership.But this
condition applies to capital assets ,such as money ,business stock and livestock.This
is on a hadith where the Prophet says:ect:``There is no zakah on ones wealth unless
one lunar calendar year transpires over its possession.``29

The jurists have differed  about the time that earmarks  the zakat year for the purpose
of  determining the nisab .Shafi`iyyah  and Hanabilah held that the nisab must remain
constant throughout the year.To Hanafiyyah the nisab must be present at the end and
beginning of the year and according to Malikiyyah  the determining point of time is
the end of the year .
In the case of earned income, such as crops,fruits ,minerals and found treasure
,including wages ,salaries professional fees it is not a condition they are classified as
earned assets(mal mustafad).

5. What to exempt for the zakat

Some jurists held that before assessing the zakat ,two requirements of the zakat payer
must be subtracted from his zakatable income before deciding as to whether he has to pay
any zakat . They are :

26 Ibid.,pp.85-86.
27 Khan , Some Accounting Issues Relating to Zakat p.109
28 Abu Saud, Contemporary Zakat,p.32
29 Sunan Ibn Majah ,p.424

 6

i. deduction of   essential needs (hawaij asliyyah)

This is a condition set by Hanafiyyah  ,Imam Bukhari and Ibn Kathir.  As to what does it
means? Ibn `Abidin ,fitting his own socio-economic condition/standard of living ,
brilliantly delineate it as :`` Those things that are used to avoid the realized or potential
destruction of human beings ; realized ones ,such as expenses for living ,clothing
,personal weapons ;and potential  ones ,such as the need to pay one`s debt ,tools for
handicraft ,home furniture ,animals for personal transportation and books for study .If a
person has money designated for such needs ,it is considered non-existent with regard to
zakat.This is similar to the case of some one whom has no water except that designed for
drinking .This water is considered non-existent with regard to performing ablution ,and
one is allowed to perform  tayammum instead.``30

However majority  disagreed by saying that this condition is unnecessary as the condition
of growth  takes care of such needs by classifying them as non-growing asset.
Nonetheless , the Hanafiyyah position is more in keeping with present requirement of
modern life and is  in harmony with the current taxation practices which exempt a certain
amount  when clearing people`s payable taxes. Further , it is supported by the general
legal implication  of  evidences from the Qur`an and  the Sunnah. 31

In The Qur`an ,we read:`` They will ask you what they should  give away? Say,``what is
surplus from your needs.``32 According to Ibn Kathir ,the surplus means what is in excess
of you and your family`s needs.33 One of the Prophet`s hadith is also taken as supporting
this understanding when he said:`` Sadaqah is taken only out of wealth``34.According to
al-Bukhari , this hadith makes it a condition that the payer and his family must not be in
need.35 It is also supported by the Prophet edict in ordering the zakat collector(in case of
fruit) to leave one third or one forth for the payer to spend on the neighbors ,friends and
relatives.36

Accordingly , the intention behind the above evidences is that all the spending must be
made out of surplus wealth. But it must be  noted ,as al-Qaradawi, cautions us that this
condition only covers basic needs or essential goods and services that one needs to
sustain himself and his dependents .It does not cover those things that are simply desired,
or they may be considered luxury37. For instance, expenditure on   holiday ,desiring to
make certain purchases not in the immediate future, or buying big bungalows or luxury
cars to escape the zakat  are some modern examples of luxury  since such items are

30 It is quoted   in al-Qaradawi ,Fiqh uz-Zakat ,pp.87-89 ,.from his renowned commentary of  al-Durr al-
Mukhtar.
31 See Abu Saud, Contemporary Zakat,pp.72-73.
32 Al-Baqarah : 219
33 This is  according  to  the  opinion by Ibn `Abbas who by  way of exegesis maintained so . al-Qaradawi
,Fiqh az-Zakat ,p.89. see also Husayn ,Muhasibat al-Zakat,p.23.
34 Sunan Ibn Majah , p.432
35 al-Qaradawi ,Fiqh az-Zakat,p.89.
36 Ibid.,see also Daud, The Malaysian Zakat System : Law and Policy Reform ,p.15
37 Ibid.

 7

neither customary nor reasonable needs .38 I believe the state  should set clear
guidelines39 from time to time as to what can be considered essential needs ,taking into
account the fluctuating inflationary movement of the market price for goods and services
that Muslims need for their daily subsistence in our time.

ii. deduction of  debt

This condition emerges from the conditions of complete ownership and the asset being
above one`s  basic needs. Accordingly ,it is another pre-requisite of zakat.But for the
purpose of application ,the jurists have differed in its details. Most importantly ,they
divided zakatable wealth into two categories : apparent (zahir)- can be seen by the poor
and detected by zakat collector ,such as livestock and crops  , and non-apparent(batin)-
not easily known to others, such money in the safe box   and business asset .40

Accordingly , with regard to the first category , some like Hanafiyyah  held that it would
be free from zakat  if overwhelmed by debt or reduces the zakatable asset owned by the
debtor. The reason being that zakat is a financial right due to the poor ,the right of the
creditor comes first before their  right . Majority on the other hand ,including  Shafi`iyyah
differed on this ,saying that zakat being an act of worship partakes in  Allah`s right  ,thus
takes priority over the right of the zakat recipients .41

 With regard to non-apparent type, again majority42 held that debt prevents zakat or at
least reduces  zakat on the assets by the amount of  the outstanding debts.
Minority held that it does not .

Nevertheless, discussing the issue from the apparent and non-apparent type ,even if not
confusing, is irrelevant today .Because it is a relative concept ,it may have suited the
jurist `s  time and circumstances .  Today due to the advance in the field of accountancy
in business  and the practice of safe-keeping one`s personal assets with the banks  no one
can hide such  assets.

The significance of the above juristic discourse, however is that the opinion which says
that debt prevents zakat is the preferred view because:

i. Caliph Uthman asked the zakat payers to pay back their debts so that  he   can
start paying their zakat43

ii. ownership in the case of debtor is incomplete
iii. the aim of zakat is to relieve those who are in need, debtor himself is one of them

so his need comes first before that of the others.

38 Ibid  , p.16
39 Abu Saud proposes the concept of consumer basket value that is normally  determined by tax
departments as we noted before . see Abu Saud, Contemporary Zakat,p.77.
40 Al-Qaradawi, Fiqh uz-Zakat , Ibid .,p.90 see also Abu Saud, ibid,pp.61-62.
41Al-Qaradawi, Ibid .,pp.91-93.
42 They represent Ahmad .Abu Hanifah and  al-Shafi`i in his new opinion. See ibid.
43Ibid.,p.92.

 8

iv. in our time, even wealthy people are burdened by loans of many kinds , and  pay
it by way of installments 44.Consequently ,if such debts are  not calculated as part
of one`s  basic requirement for the purpose of calculating zakat ,the whole life one
would not be able to stay free of debt and pay the zakat  .

The Contemporary call for rethinking of the above issues

Since eighties where radical changes  have occurred in the structure and nature of wealth
, some thinkers have been  calling  for a fresh understanding of the above  fiqhi issues for
its just and consistent application in the modern time .45

As to what are the rationales for the case of renewal and reform (islah wa al-tajdid),the
proponents maintain as follows :

1.Sticking to classical fiqh frame of reference would obviously excludes many
contemporary forms of wealth from the application of zakat. In a study Kahf made an
estimation of zakat proceeds in eight Muslim countries  and it was found that if the zakat
was applied on livestock ,agriculture ,mining and monetary holdings ,zakat proceeds
would be between 0.9 % and 2%(except in Sudan where it is 4.3%) of the GPD.But when
an estimation was  made beyond the classical fiqhi position the rate of estimated zakat
proceeds  increased to between 2.0 % and 7.5 % of the GDP.46

2. upholding some of the  traditional  views on zakat  may divert wealth  from poor to the
rich. For instance , the nisab of money if determined on the basis of silver  ,the may be
imposed on  the poor as  silver has  sharply  depreciated in value  as compared with gold .
Similar anomaly will arise if we impose the zakat on the gross products of the crops as
maintained by the classical jurists since all land produce will be subject to 10% or 5%
zakat once the amount harvested reaches 653 kg of rice .Thus a paddy cultivator once
obtains  that amount (approximately RM 1800,00) has to pay its zakat.However ,to
calculate the nisab on  the net amount after deducting the agricultural expenses and the
farmer`s own basic requirements would resolve this anomaly . 47 Another way that this
arises is by exempting the fixed assets for zakat .This is so  because in the time of
revelation business involved a very little fixed assets in a shop or a spot with  a few
business implements ,but todays business involves  large amounts of capital invested  in
fixed assets ,such as land ,buildings ,machinery and fixtures .Hence , to impose zakat on
stock and cash alone let say in the case of  a manufacturing 48 company would result in
imposing zakat on the poor and sparing the wealthy .

44 The scholars when addressing the issue as to which kind of debts are deductible ,expressed two views:
both deferred and immediate  ,only the immediate type.However , for today`s application ,the first view
which covers the deferred type encompassing the system of debt by part-payment in our time is the suitable
legal stand to which we subscribe .for details see,ibid ,pp.94-95.
45  Kahf ,Zakat : Unresolved Issues in Contemporary Fiqh,p.173.
46 See for table based on an  unpublished  study in IRTI,1987,ibid  ,pp.185-188.
47 See Khan who raises  the problem in the context of Pakistan , Some Accounting issues relating to Zakat
pp.104-105
48 Ibid.

 9

Issued to be revised

Due to the above reasons ,the case for reform presses for revising  the following :

Growth as the base of Zakatability

The classical notion of growth as the criterion of zakatability has been seriously
questioned by Muslim economists .For instance , Kahf ,criticizes it in many ways 49
including the following :

 First ,it is said to be faulty as a concept. The reason being that it exempts fixed asset of a
business entity form zakat but this is not unproductive as the theory made it to be .Instead
,it  equally contributes to the production process like the circulating wealth . To equate
items devoted to personal use (quniah) to business fixed asset is invalid ,since the latter is
employed to make profit(in a sense is growing).The argument that the Prophet exempted
primitive hand tools of production in ancient Madinah cannot be equated with modern
machinery and plants of our time .

Secondly , it is argued that the classical jurists have not been consistent when they
applied this on assets that do not grow at all .For instance , idle  money (is like idle fixed
asset)or trade  inventory which is in loss  or in debt which are not growing . Or when they
excluded its application from wealth that do grow .For instance , exclusion of fodder fed
livestock ,trees  and domestic animals.

Thirdly ,it is also argued that the application of growth in agriculture produce is also
arbitrary since they are  not growing ,actually or  potentially , as they themselves are the
result of growth process.50Moreover to assume that crops are the increase of land is also
invalid as they are the increase of the seeds.

Fourthly ,if growth is  the raison d`tere (illah )of zakatability then its absence ought to be
a reason for the waiving. This is not the case as trade inventory is still zakatable even if it
incurs loss.

Accordingly , thinkers such as  Kahf feels that the classical jurists were mistaken in their
ijtihad to shift from richness(ghina) as the textually declared  `illah for zakatability of
wealth  to that of growth,51 which needs to be reviewed .But what is the operational
definition of ghina ,he does not elaborate . Abu Saud seems to lay down a practical
formula , though not in the context of ghina as the yardstick ,when he says:``The theory
of ``growth`` as postulated by the past jurists is fraught with complexity and anomalies

49 Kahf ,``Zakat : Unresolved Issues in Contemporary Fiqh ,p.181
50 Abu Saud says the theory is misleading and unscientific .,see Abu Saud Contemporary Zakat  ,p.70.
51 Kahf ,Zakat : Unresolved Issues in Contemporary fiqh ,p.183,  Mohd.Daud Bakr, also  subscribes to the
same view but like Kahf does not offer any  practical formula for ghina  as it can be more vague
than the concept of   growth if left undefined . , see Daud  ``The Malaysian  Zakat System : Law
and Policy Reform pp.4-12.

 10

.In fact to apply it one must give the word so many arbitrary implications that the
integrity of the theory itself is destroyed .At present we can hardly find any need or
justification for such a theory .Suffice it to state that zakat is due on all economic goods
once they exceed nisab, except for those goods acquired for personal use or consumption
,as well as on all money in its different forms if the amount withheld exceeds the limit
.52``

On the other hand,  some  other contemporary thinkers  like  al-Qaradawi and official
bodies/governmental  still  advocate the relevance and validity of growth  as the base of
zakatablity ,which is reflected by the Saudi practice of exempting business implements
and machineries from zakat because they do not grow53.

What should be the nisab today ?

Nisab as pre-requisite derives its validity from many ahadith, some important among
which are:
-The best of sadaqah is that which is paid out of opulence 54.
- There is no zakat on less than five camels,and there  is no zakat on less than five
awsuq(measurement of volume ) of grain and there is no zakat on less than awaq of silver
(200 dirhams).55

Rationalizing the above limit of exemption ,al-Dehlawi observed that the raison d`tere
for such was that in the time of the Prophet five volume of grain (awsuq)was sufficient
for one family consisting of three persons for one year.Thus the idea was to subject to
zakat what was in  excess of the above 56

Building on this, Abu Sa`ud maintains that unlike the traditional understanding that all
the above limit of exemptions are permanently fixed ,one would state that if five awsuq
was made a criterion for zakatablity of grains as it was enough to sustain a family in the
time of revelation ,it cannot be the case today.Accordingly the nisab of assets should be
reviewed in accordance with actual changes in circumstances ,which is a well-established
principle of fiqh.57This is also justified by textual evidences ,such as the Prophet
statement,`` no zakat is due unless in case of affluence .58`` Definitely   a farmer
harvesting five awsuq of rice in a country like Malaysia is not affluent nor it suffices him
for a duration of one year.Abu Sa`ud  therefore ,suggests that there should be a flat rate of
nisab for all zakatable wealth ,on the rationale  that ``the basis of zakat is to exempt that
amount of wealth which  is considered ,in a particular community ,sufficient to sustain
the family or individual for one year….59`` According to him ,the procedure would be :

52 Abu Saud Contemporary Zakat  ,pp.71-72.
53 Shaik and the fatwa by  Majlis Tahqiq Masail Hadirah represnent this groups stand ,see Sadeq , A survey
of the Institution of Zakat ,p.38.
54 Sunan Ibn Majah ,p.432
55 Ibid .
56 Saud, Contemporary Zakat ,p.75
57 Ibid.
58 Sunan Ibn Majah ,p.432
59 Saud, Contemporary Zakat.,p.75

 11

i. to determine the livelihood requirements of individuals and families (hawa`j
asliyyah),similar to goods and services that comes under the definition of
consumer basket for the sake of taxation in the West .

ii. To determine the basket value in terms of money at the time of paying zakat  .
iii. To regard the value of the basket as limit of exemption that should be

deducted from the income before calculating the due zakat .

In accordance with the above , Abu Saud suggests that we would overcome the disparity
that  arises from the classical notion of different nisab for different items60.

Kahf offers the rationale for such a rethinking when he maintains : ``The reason why we
need to rethink about the nisab is that the relative prices of the items of zakah have been
changing over time, for example, the values of the nisab amounts of gold and silver are
quite different in the contemporary world and hence the existing nisabs of different new
items do not correspond to cost of living. Moreover , the relative importance of items in
the basket of basic needs have also changed significantly.  Under these changed
circumstances, we need to think of deriving a formula of nisab on new items which are
derived by fuqaha, keeping in view the "nisabs" of items in the Prophetic traditions, their
relative prices and weight in the cost of living at that time and applying this formula to
determine the nisab of new items in the contemporary world. In particular, the nisab of
Zakatable new items will have to be determined consistently. This is important in order to
preserve the virtues of zakah and to achieve its objectives. 61

 Manan who also  supports the same idea suggests the formula to consist of defining the
standard of living of an average family in a given socio-economic context by following a
national guideline so as to exempt that from Zakah. Any-thing beyond this is subjected to
Zakah.62

Raquibuzzaman, another proponent of the same  proposes that we need to allow different
nisab and  exemption limits for each country, as situations vary from country to country
..His arguments is that the Prophet fixed those to suit the conditions of the Arab society in
the seventh century. Reviewing them in line with todays conditions would not violate the
Sunnah as to him there is no hadith to the effect.63 So to him nisab should be the value of
what  is adequate to maintain a reasonable standard of living, and this should be changed
from time to time to reflect the changes in the cost of living .64

60 He means to imply that the owner of five camels and  harvester of five awsuq of grain would be subject
to one standard limit of exemption.see ibid.,pp.76-77. see also  Shawqi Ahmad Dunia ,``Ta`ammulat fi
Ba`d al-Jawanib al-Fiqhiyyah li al-Zakat ``,in Abhath Nadwat al-Tatbiq al-Mu`asir li al-Zakat (al-Azhar:
S.A .Kamel Centre for Islamic Economics ,2002),vol.1,p.22.
61 Kahf ,Unresolved Issues in Contemporary fiqh .pp.13-15,& 44-45
62 Sadeq, A survey of Institution of Zakat ,34
63 ibid.
64 ibid,p.35

 12

On the contrary others65   who oppose this idea in principle ,some of them allow it when
the  conventional rates and nisab are not sufficient to remove mass poverty .To this, they
maintain that there is   a precedent by `Umar who  changed the  Zakah rates on horse . 66

Their main arguments is that  nisab and the rates of zakah  are fixed  by clear directives
of the     Qur'an and Sunnah.Therefore ,based on  the established principle of usul al-fiqh
``,no ijtiahd  is allowed on issues covered by textual evidences(la ijtahad fi mawrid al-
nass).`` Accordingly  such laws become part of immutable laws of the Shari`ah .Any
deviation from this principle can lead to unfortunate results. The reason being that if
changes in the zakat rates are allowed, this could lead to frequent changes in the zakat
rates depending on the expediency of the ruling authorities( and it may even  become an
election issue in countries having multi-party systems) and this will destroy the sanctity
of zakat which is a form of `ibadah. 67 Majlis Tahqiq Masail Hadirah of Pakistan ,a  body
representing this stand strongly opposed the government intention to revise the nisab
,among others ,by contending that these laws do not derive their legislative validity from
ijtihad to be revised and reopened but from the Qur`an,hadith and ijma`.They rebutted the
contention that due to  big gap between the value of gold and silver ,we need to rethink of
the issue , by saying    that it  is not a new issue ,it has happened in the time of the jurists
but they did not alter the law as it would be ultra vires of Sunnah and ijma`.68 In terms of
economic effect also ,  the Majlis said ,`` an increase in nisab will lead to a fall in the
number of zakat payers and an increase in that of zakat receivers. It will result in two
problems. First, demand for Zakah will be more than supply. Second, it will appear that
Zakah encourages living on others, which is not really encouraged in Islam.``69

Al-Qaradawi , also while opposes any rethinking on areas such as nisab and rate ,mainly
because zakat ,according to al-Shatibi is,` the kind of transaction that have some
characteristics of  worship` ,thus we have to limit ourselves to the texts .Accordingly ,to
al-Qaradawi ,such matters are clearly defined by the texts and agreed by ijma`.He thus
concludes :`` I disagree with those who claim that the minimum exemption and rates of
zakat are subject to change according to changing circumstances ,on the grounds that
such changes conform to the objectives and common benefits of zakat .I believe that such
changes alter the features of zakat and reduces it to a mere civil tax ,like any other taxes
imposed by the government .70``

The Saudi zakat administration while favor such a hard line stand on this issue ,admits
changes but within the sub-structure of textually defined nisab .For instance ,due to that
fact that  the relative prices of gold and silver have changed, it follows the value of gold
(i.e., 85 grams of gold), ignoring the value of silver to determine the nisab , which is the
case in Pakistan .71

65 see also ,Mushfiqur Rahman ,Zakat Calculation Based on al-Qaradawi (United Kingdom: The Islamic
Foundation ,2003),pp.3-5.
66  People like Shaik suggest this.see Sadeq, A survey of Institution of Zakat .35
67 Ibid .
68 Ibid .,p.35-36
69 Ibid ,p.36
70 al-Qaradawi ,Fiqh uz-Zakat ,p.xxxviii.
71 Ibid.

 13

The problem with the proposed revised nisab

The rationale of nisab according to classical fiqh was to impose zakat on the wealthy and
not on the poor ,i.e.,it is an  indicator(mazannah) of ghina (affluence).If this is taken
literally ,a  farmer who today harvests five awsuq of wheat and needs multiple of that
amount to fulfill his other needs ,for all practical purposes is poor .Accordingly,as
maintained by Shawqi , taken this rational together with the textual evidences which state
that sadaqah is on the affluent(ghani) ,we need to rethink about the nisab.But this option
itself is beset with complexity .For instance ,how to objectively determine ghina? Even if
we adopt the Hanafiyyah criterion of imposing zakat on the nisab which  is beyond the
level of the zakat payer`s subsistence (al-hajat al-asliyyah),  the question is : why do we
still need to require the surplus to amount to the jurisprudentially  defined concept of
nisab? Or shall we stick to the condition of yearly term ,arguing that any one who has a
surplus /saving amounting to nisab ,that is a sign of his ghina ?  If we abandon both the
criteria of nisab and ghina and   advocate  flat rate for all types of property, what would
be the juridical base of such an option ?72

Revision of the rate

On the revision of the rate .Kahf though  do not offer any practical formula ,suggests that
the fixation of rates should be consistent with the prescribed rates keeping in view the
matters of wealth transformability and  the multidimensional nature of dynamic activities
in the contemporary world. This would enable the state  to  redistribute a sizeable amount
of wealth from the rich to the poor, and in view of the fact that the rich tends to indulge in
"conspicuous consumption" beyond social limits of consumable durables.73

  This is again not agreed by al-Qaradawi and others as it would be ultra vires of the
Sunnah .74 Al-Farah also subscribes to this view by maintaining that no ijtihad on
textually defined measure of `ibadat  .It is also rationale that Islam in prescribing the rate
has anticipated the interest of both the zakat payer and the beneficiaries .75

What to exempt?

The scholars while agreeing with the traditional exemption of wealth that the zakat payer
needs for fulfilling his livelihood requirements ,they disagreed  with the following:

i. fixed assets of the business

For instance ,Kahf  says : `` consistency requires imposition of zakah on fixed assets,
for example. This is because both of "circulating assets" and "fixed assets" contribute

72 Shawqi Ahmad Dunia ,Ta`ammulat fi Ba`d al-Jawanib al-Fiqhiyyah li al-Zakat, pp.21-23
73 Sadeq , A survey of Institution of Zakat ,p.34  see also ,Muhammad Nejatullah Siddiqi Muslim
Economic Thinking: A Survey of Contemporary Literature - Part Three First International
Conference On Islamic Economics (Slected Papers)  at http://www.financeinislam.com retrieved
on 26/01/2007
74 al-Qaradawi ,Fiqh uz-Zakat ,p.xxxviii.
75 Abd al-Fattah Muhammad Farah, al-Tawjih al-Istithmari li al-Zakat (Dubai : Bank Dubay al-Islami
,1997),p.28

 14

to production process and hence, to be consistent, both should be Zakatable 76``.He
continues by saying :`` it is not right to say that fixed assets are zakatable only if these
produce any return .The latter opinion is inconsistent because idle cash is considered
Zakatable even if it does not produce any return, but fixed assets are exempted for not
earning return. This will imply favoring large holdings and penalizing small ones,
since the use of fixed assets varies directly with firm size. This lacks Islamic
rationality. 77``

Other scholars like Abu Zahrah, Khallaf, Hassan and Al- Qardawi differed with Kahf by
maintaining that only the return would be zakatable and not the fixed assets .78 OIC Fiqh
Academy in  1985  also held that fixed assets are  not subject to zakat ,which is reflected
in the Saudi application of zakat .79

ii. type of deductible loan

In our time  situation where one incurs debt is different from the time of the classical
jurists. Every one ,particularly  in the wealthy country starts to be burdened by the
running debts the moment he steps into the primary school. By the time he becomes a
bread earners ,he is heavily burdened by loans against residential houses ,cars even
business . Accordingly, if the stipulation of exempting debt from zakat is not
understood correctly , many affluent people with expensive cars , houses etc would be
exempted from zakat.Shafiqur Rahman seems to   advance an enlightened opinion on
this by saying that by agreeing that loans that one incurs on these items definitely
come under the definition  of basic necessity. Now a question arise :  are  all types of
debts  deductible ?He answers it in the negative and offers a formula of  deductible
loans as follows:

i. be of modest type and not of lavish and extravagant type .Thus the
loan of a luxurious car and house would be deductible to the extent of
the price of a modest type and any thing over and above it would not.

ii. be considered as a basic necessity .For instance,  one  car in good
condition that suffices for a small family is a necessity but the second
one not. Hence only the loan of the first  car qualifies as deductible
debt

iii. interest accruing on such debts should not be deductible

In this way ,he rightly points out ,that we can strike a balance between the two extremes
positions of either not exempting debts at all when  calculating zakat or deducting all
types of  debts whether necessary or not.80

76 Kahf ,Unresolved Issues in Contemporary fiqh  , p. 11
77 Ibid,p.13
78 Sadeq , A survey of Institution of Zakat  ,p.32
79  Scholars like Maududi and Awad also propound  the same legal stand ,see ibid,p.33
80 Mushfiqur Rahman ,Zakat Calculation Based on al-Qaradawi ,pp.32-37.

 15

 Evaluation: bridging the gap between classical law and modern views

From the above,  an ordinary citizen(layman) would have  two sets of  laws in accordance
to which ,he is supposed to fulfils his obligations of zakat .The most perplexing question
confronting him in this process is  obviously one of:  which law new or old(constructed
by modern or traditional /and neo-traditional thinkers )  should he follow ? Another
dimension  , mostly ignored by our  well-intentioned scholars from a layman perspective
,is which one is the correct law. In the lines that follow ,I based on my  reading of both
the old fiqh and the new debate suggest the following:

1. On the case-justification  for reform

Firstly ,no one should dispute the need or  the extension of zakatablity base to include
the new sources of income within the structure of textually defined types of wealth
known to us. To this ,there is clear directive from  the Qur`an that every wealth (mal)
has to be cleansed and its owner purified .Thus this point for rethinking  as raised by
Kahf should no longer be a point of  polemics between the modern and conservative
`ulama.
Secondly  , the goal- frustrating juristic ruling of subjecting every five awsuq of
grains or fruits to zakat ,without considering the subsistence requirements of the
farmer and his cost of farming  though supported by the ruling of some  fuqaha
,cannot  stand the force of prohibiting the imposition of zakat on the poor ,i.e, ``no
zakat except on the opulence ``and the Hanafiyah requirement of  zakatable  assets to
be above one`s basic needs . Hence, this issues should also rest as settled as modern
legislation in some jurisdictions like Pakistan have already enforced this maqasid-
oriented and internally consistent position of the law.
Thirdly, definitely, the distinction between modern types of fixed assets and the
primitive tools of business is a real case for reform but it needs to be finally settled by
legislation.

2. On the growth as the base of zakatability

    One would agree on the questionability of the growth theory from an economic stand
point as well as its somewhat inconsistent application in identifying the zakatable wealth
by its jurist architects .But to say that the classical jurists erred in applying this to impose
zakat on idle money or trade inventory amounts to exceeding the limits of rationality
when one deals with matters of Islamic law.  These two items were made zakatable by
unimpeachable evidences from the Qur`an and the Sunnah.  Again dismissing such a
well-established theory in favor some vague concepts like ghina, I am afraid, would not
advance any case for reform.  On this issue, however, one would favor the proposition
laid down by Abu Saud as a viable criterion (any economic goods that reaches the nisab).

3. On the nisab

Here we are confronted with two conflicting interpretations; one premised on the text of
the hadith, another on their purported ratio legis as construed by renowned al-Dehlawi .If

 16

we go by the ratio legis of the law and say good by to the textually fixed nisab, then the
questions is: can the human constructed reason de`ter of the law overrule the letter of the
law itself?  There is unanimity among the legal scholars that in matters of `ibadat it
would be ultra vires of the juristic activism in the context of Islam.  That is why Kahf
was aware of this restriction when he suggested that such may be the course in the case of
new forms of wealth but not in the case of those specified by textual sources (nusus).On
this issue therefore, the stand by the opponents of change is to be upheld as is in line with
the fixation of nisab by unimpeachable evidences from the sunnah (contrary to what has
been the claimed) 81

4. On the rate

The question of rate ,I believe , also involves touching the stable part of zakat with the
intention of augmenting the zakat revenue .Definitely it may have good economic reason
but jurisprudentially it raises the question of modifying the textual law by the flux of
human rationally construed economic expediency  .Thus ,the classical position still reigns
supreme and the economic reason for augmenting the zakat revenue, which is the motive
for re-rating, can be fulfilled  through developing the mechanisms for investing the zakat
fund in productive ventures as maintained by Farah . 82

5. On deductible assets

Excluding the fixed assets of business from zakat can no longer be supported by
economic reality of their role in today’s business productivity .One may agree with
reform proposals in this area.  This is similar to the redefinition of zakat beneficiaries in
our time and well come within the province of human reasoning (ijthad).But for the
practical implementation, it still remains a point of academic interest unless it is backed
by state legislation.
Definition of deductible loans as proposed by Shafique is a judicious construction which
should be regarded as correct statement of the law on the type of deductible debts.

 Implications for Banking and Finance

Bank as a corporate body for the purpose of fulfilling its zakat obligations may have to
inform its share holders about the contemporary state of the law.  For all practical
purposes, it deals with economic goods and services, thus it has to pay their zakat .For
instance, Bank  Faisal of Egypt pays its zakat through its own Zakat Box (sunduq al-
zakat ).83 Accordingly, when assessing its zakat, it may opt of the choices as offered in
terms of nisab, rate, and deductible assets as detailed in this paper.  Nevertheless, for a
relatively detailed implication of zakat in relation to banking and finance, we need to

81 The scholars of hadith like al-Shawkani ,al-Dar Qutni and al-Bayhaqi regards the ahadith prescribing the
nisab as authentic.,see al-Bayhaqi ,al-Sunan al-Kubra ,vol.4,pp.81-107.
82 Farah, al-Tawjih al-Istithmari li al-Zakat,p.28

83 Fu`ad Abd Allah al-`Umar ,Nahw Tatbiq Mu`asir li Faridat al-Zakah,(Kuwait : Dhat al-
Salasil,1984),pp.42-43.

 17

address two main issues: first, band as zakat paying institution and second bank as a
financing institution of zakat fund.

Nature and function Islamic banking

Islamic banking as a business enterprise   postulates to provide Muslims with an
alternative way of financing against the interest based conventional banking system.
Operationally it serves as an inter-median between the savers and investors under the two
tier-madarabah contract, first among the depositors and the bank and seconds between
the bank the parties to whom finance is provided.  The bank as the operational framework
for business basically derives funds from its shareholders, mudarib deposits and demand
deposits and muadarib investment accounts.  From  these finds ,it offers numerous types
of financing including mudarabah , musharakah , qard hasanah, murabahah, bai`
mu`ajjal, al-ijarah thumma al-bay`,ijarah ,iqtina etc. 84

As to what is the place of zakat in this framework?  Saleh Kamil85 , in his call for a shift
from Shari`ah-compliant financial products to those  of Shari`ah based modes of
financing underline the role of zakat as follows: ``The unique Islamic institution of zakat
is an ideal way of mobilizing funds and mitigating this short-term view, for short-term
investment carries a higher zakat rate and vice versa.  Real estate investments are an ideal
long-term way of harnessing both investments and a fair rate of zakat.  Muslim countries
should institutionalize zakat as it is the most efficient fiscal (tax) system and that a whole
economy can be run effectively on the basis of zakat.  Contrary to the common believe
zakat is not merely a payment to the poor and needy, but can be harnessed for adding
value in education, training and tourism."86

1. Bank as a zakat paying business entity

For the purpose of zakat, bank being a corporate body is business entity called sharikat
al-`inan 87.It initially takes off as a company on contribution of share capital by the share
holders.  Later on, it builds up more capital from the investors and depositors
.Accordingly, for the purpose of zakat, among others, the following questions would
arise:

i. does the bank as a company is subject to zakat?
ii. who should pay the zakat on shares of the share holders and how?
iii. who should pay the zakat on the investment accounts?
iv. who should pay the zakat on saving and current accounts?

84 Ziauddin Ahmad ,Islamic Banking : State of the Art( Riyad: IDB Islamic Research and Training Institute,
1994)  ,IDB Prize Winners` Lecture Series No.2, pp.14-33
85 He is  president of the Dallah AlBaraka Group and a member of  the Governing Council of  Bank
Nagara`s International Center for Education in Islamic Finance .  see www.menafn.com, retrieved on
28/02/2007.
86 Ibid.
87Husayn Husayn  Shahatah, ``Muhasibat al-Zakat Li al-Masarif al-Islamiyyah : Bayn al-Fikr wa al-Tatbiq`
, in Abhath Nadwat al-Tatbiq al-Mu`asir li al-Zakat (al-Azhar: S.A .Kamel Centre for Islamic Economics
,2002),vol.2,p.8

 18

http://www.menafn.com/

v. what is the jurisprudential framework for investment of zakat fund for the
benefit of the recipients?

The answer to the first four questions, according to Shahatah are:

Zakat obligation the bank

It is a settled law in Islamic jurisprudence that bank as an artificial person (shakhs
`i`tibari) by itself cannot be a legal person (mukallaf).But its shareholders as natural
persons are.  Thus, it (bank) answers its liability through the natural agent that is the bank
general manager.  The manager, on behalf of the shareholders (by way of wakalah)
would be responsible for giving out zakat from the business.In short, the zakat is on the
share holders of the corporate body.88

Mode of payment

The zakat would be paid by the management of the bank .The applicable fiqhi rule would
be the rule on `urud tijarah i.e market price of the capital shares plus the profits out of the
business.  As to how should it be paid?

Theoretical aspect is as follows:

Urud al-Tijarah is defined as what has been kept for sale and purchase for profit89.
Today business asset consists of three kinds of wealth: first, cash and bank balance.
Second, working capital and fixed capital .Lastly, receivable debts.  Now the most crucial
question is what business asset is zakatable and what is not.

Some preliminary answers are:

2. Zakatble assets consist of:  cash and bank balance, loans and advances obtained
(profit-earning working capital plus the receivable debts.90)

3. non-zakatable assets   are:   fixed assets, namely tools and raw materials, short-
term liabilities (loans repayable next year), long term debts and loans obtained for
personal consumption 91 It is to be noted that zakat paid by the firm should not be
treated as expenses otherwise the business tries to realize it from its customer
through pricing its products, thus frustrating the whole objectives of zakat due
upon it.92

88 Ibid  ,p.9.The classical jurists differed as to who should pay: the Hanafiyyah held that the individual
share holders but majority held that the corporate on their behalf .The latter is regarded to be more practical
by Modern scholars like al-Qaradawi and modern state also adopt this, such as the  banks in  Dunay
,Kuwait and Sudan regard zakat  as  part of  annual expenditure of the bank. For details see,al-`Umar ,Nahw
Tatbiq Mu`asir li Faridat al-Zakah,p.43 see also  al-Sultan ,al-Zakat : Tatbiq Muhasibi Mu`sir ,pp.76-79;
al-Muzayni ,al-Murshid al-Hayran fi Ahkam al-Zakat ,pp.54-57.
89 Al-Sultan ,ibid,p.68
90 Hasan,``Social Security System of Islam``,p.24.
91 Khan, SomeAccounting issues relating to Zakat  ,p.107.
92 Ibid.,po.120.

 19

Zakat on investment accounts

The investment account may either be a general investment type or specific (project
financing type).  According to Shahatah, in both cases, the zakat would be on the investor
himself except that in the first case, the zakat would be on the profit that he collects and
in the second situation, the zakat would be on both the principal sum plus the profit.  93

Zakat on saving and current accounts

In both the cases, the zakat would be on the holder.  In both cases, the rule of zakat on
money applies.  Money plus the accrued gift on the saving and on the principal sum on
the current account.94

2. Bank as a Zakat financing Institution

This issue is another debatable issue .To delineate the role of banks in relation to these
activities, we need to thrash out the e debate first.
The jurists have generally held two divergent views on this 95.One group maintain96 that
the zakat collections must be disbursed immediately to the recipients, the state has no
locus standi to invest it with the view of generating more income.  Their main arguments
are97:

- it not only blurs the designated class of beneficiaries, it also contravenes the
principle of tamlik by the recipients, namely the faqir, miskin, amil and mu`allafat
al-qulub among them.  The reason being that the Qur`anic use of proposition li
implies transference of zakat from the owner of wealth to these group.  Hence the
ruler has no such discretion on the matter

- It is against the condition of prompt distribution of the zakat to its recipient .This
is the view of the majority of the jurists who argued that delay might be
detrimental to the interest f the poor in the event if the fund is destroyed or lost.98

- zakat is not supposes to be reserved for future need, it is primarily designed to
alleviate present economic need of the recipients.

- using zakat in income earning projects is a kind of accursed innovation in the area
of immutable aspect of Islam .ie. Legislating on a pillar and religious rite.

93 Shahatah, Muhasibat al-Zakat Li al-Masarif al-Islamiyyah : Bayn al-Fikr wa al-Tatbiq ,p.11
94 ibid.,p.13
95  According to the resolution adopted by the Fiqh Academy , in its third round of discussion on 13
October ,1986, there were four different position on the issue: conditionally  permissible ,  allowed on the
surplus of the collected zakat ,permissible to the extent of using the portion allotted to fi sabil Allah (in the
cause of God ) only and total prohibition . see Husayn Ali Muhammad  Munazi`, ``Tawzif al-Zakat fi
Mashru`at Intajiyyah `` in Abhath Nadwat al-Tatbiq al-Mu`asir li al-Zakat (al-Azhar: S.A .Kamel Centre
for Islamic Economics ,2002),vol.3,p.8
96  Scholars like Qureshi  and  Taqi Uthmani represent this point of view. Daud,Malaysian Zakat System
p.19.
97 Farah, al-Tawjih al-Istithmari li al-Zakat ,pp.45-46
98 Al-Qaradawi ,Fiqh al-Zakat ,pp.519- 520

 20

On the contrary, majority99  disagreed and rebutted the opponents `s arguments by
saying:

- Since according to majority of the classical schools, the ruler can spend the entire zakat
fund for the benefit of one class alone and that also at different rate.  Accordingly, it   is
well within his power to use zakat fund for the benefit of recipients in this way if it would
be for their maslahah .It is also not against tamlik (transference of   private ownership to
the poor) as some jurists like Hanafiyyah and Shi`ah Zaydiyyah regarded feasting and
clothing of the poor from the zakatable income of the zakat payer as fulfillment of his
zakat.  100

- its disbursement does not have to be prompt as maintained by Abi Bakr al-Jassas of the
Hanfiyyah and al-Razi and Shi`ah Imamiyyah.  According to al-Razi, it is a well-
established principle of usul al-fiqh that mere command (to give zakat) does not require
delayed or prompt disbursement but requiring the disbursement itself ( sooner or later
).101 The Hanafiyyah also generally classify zakat as an obligation with extended due
time (wajib muwaasa`/bi al-tarakhi).102Accordingly, instead of giving the poor recipients
their share in lump sum, they could be given monthly stipend from the proceeds of the
zakat investment.

-  the risk could be avoided by proper financial planning.
- The very fact that `Umar  was insistent on given the poor an amount that would suffice
them for rest of their  life ,and the Hanafis and al-Shafi`is agreement on providing the
poor with tools of labor  from zakat fund to become self-reliant are cogent proofs that
zakat can be used for future security and the need of the recipients.103

- It is not an innovation of denounced type (madmumah) as it  benefits the recipients and
not  harm them , thus belonging to the category of  approved /praiseworthy innovation
(mahmudah )  which can  be  initiated on financial matters, such as zakat.104

Accordingly, the majority held it to be permissible provided that:

- the ultimate ownership of its return and the capital sum be spent on the recipients
- only the surplus fund should be invested
- investment activities should be carried out with extra caution and prudent

financial planning so as to avoid loss to the pool of zakat property.

Nevertheless Qureshi, on the other hand, still contests this idea by maintaining that
should not be given a blanket approval and this matter should be left to the to the poor

99 Scholars like al-Qaradawi,al-Zarqa, Wahabah al-Zuhayli  al-Nabhan, Shahhatah , Munazi` and Farah
represents this view .see Munazi` ,Tawzif al-Zakat fi Mashru`at Intajiyyah ,p.4
100 Ibid ,pp.17-18.
101 Ibid  , pp.14-15
102 Al-Qaradawi ,Fiqh uz-Zakat ,p.519
103 Munazi` ,Tawzif al-Zakat fi Mashru`at Intajiyyah ,pp.19-21 ; Farah , al-Tawjih al-Istithmari li al-
Zakat,pp.51-52
104 Farah ,ibid,p.52.

 21

and needy to choose between consumption and investment, since their consumption
needs may be more pressing which may be compensated only by very high profits .In the
investment that may be defeated if business incurs a loss.  Thus, the optimal choice for
the poor and needy may be to avoid any investment from zakat funds.  105

In my opinion, the view of the majority is to be credited as it receives support for the
Prophet`s permission to a group of people from `Uraynah to drink milk of the zakat
camels 106.This according to Ibn Hajar implies that other uses such as riding and leasing
would be also permissible, which by extension covers the issue in question.  Further, it is
strengthened with the substance of many jurisprudential rule of zakat including the
following:

1. it is to benefit  the deserving poor recipients by providing  them with
working capital or tools of profession as was agreed by all the jurists

2. it is in line with the idea behind the  territorial disbursement of zakat as
according to al-Qaradawi was intended to effectively help in the
alleviation of poverty .107 In this process  it is also in consonance with
giving priority to the poor and destitute as the ruler may deem fit .This
definitely also  harnesses the proposition for productive use of zakat fund
to make these segments self-sufficient108

3. From the economic point of view, productive disbursement of zakat, to the
poor and needy would thwart the inflationary effect109 of zakat on Islamic
economy .Accordingly from this stand point, it at macro level, should be
permissible as a matter of economic necessity within the framework of
Islamic fiscal policy.  The productive disbursement scheme for this   is
suggested to be  through preparing a surplus zakat budget .Then this fund
should be mobilized by investing it in industries to provide employment to
the poor .The profit out of these investment would be granted in the form
of zakat certificate ,cashable  at the option of the holder after a period of
three to six months .In this way the poor people propensity to consume
more (demand ) at least  can be dampened for a short period 110.Another
dimension is that investment oriented disbursement of zakat funds would
have cumulative effect on reducing poverty. 111

105 He commented on investment proposal  by expressing his misgiving about it .see Shawki Ismail
Shahatah,`` Limitation on The Use of Zakah Funds  in Financing the Socio- economic Infrastructure  of
Society``  ,in Imtiazi et all (edits),Management of Zakat in Modern Muslim Society ,(Riyad : IDB,IRTI
,2000),p.75.
106 Quoted in Farah , , al-Tawjih al-Istithmari li al-Zakat,p. 55.
107 Al-Qaradawi ,Fiqh uz-Zakat ,p.637
108  Quoted in  Shahatah, Limitation on The Use of Zakah Funds  in Financing the Socio- economic
Infrastructure  of Society  , p.62.
109 It would be inflationary as the  poor have higher tendency to consume than the rich .If they are given
direct cash as zakat ,the result would be increase in the aggregate demand in the economy (push the price
higher ). It thus further damages the interest of the poor. See Sabahaddin Zaim ,``Recent Interpretation  of
the Economic Aspect of Zakah ``,in in Imtiazi et all (edits),Management of Zakat in Modern Muslim
Society ,(Riyad : IDB,IRTI ,2000),p.114.
110 Ibid.
111 Ibid.,p.116

 22

Proposed theoretical mechanisms for financing The supporters of zakat potential for
financing have offered various models for zakat investments.  I  had access to the
following models .

Shahatah`s proposed model

Shahatah, while proposing a framework for the contemporary use of the zakat fund in
financing the Islamic socio-economic projects112, suggests the following113  :

1. zakat revenues can be used in lawful mudarabah projects, with the Zakah
authority acting as the owner of the capital, and the zakat beneficiaries acting as
partners by contributing their work.  The profits will be distributed between them
on the basis of a pre-decided ratio.

2.  loan can be provided to able-bodied beneficiaries who pay the money back, it
may generate a new source of finance for the beneficiaries.

3. giving possession of low cost houses on the basis of rent financing.
4. financing partnership businesses  that would culminate  in the ownership for the

benefit of the  zakat recipients
5. provision for leasing light fixed assets and production tools with nominal fee or

rent to the poor or the needy
6. interest free loans to those suffer calamities, illnesses or costly surgery.

 Anwar`s Proposed Model

According to his model, a jurisprudentially consistent mechanism can be worked out for
the purpose of zakat utilization in financing development projects.  To this end, he
proposes the establishment of a special financial institution called, "Awqaf-Zakat
Investment Fund" (AZIF) from the zakat fund.  It would be registered as a waqf
institution and shall operate as profit seeking corporate venture.  It may have its branches
and affiliate offices throughout the country, investing zakat funds into long-term concerns.
Its  paid up capital  would be distributed in terms of shares to the zakat beneficiaries .It in
collaboration with Islamic banks would engage in financing activities in accordance with well-
known shari`ah compliant modes in projects that most benefit the poor and the needy/helps the
poverty alleviation .For example ,financing of building  infrastructure in the rural areas
,financing of the small and medium –sized industries ,such as fisheries and poultries   run by
poor and for their benefit  etc. To manage the loss risk, it would diversify its investment
portfolios as well as it builds a loss reserve account from its earnings over time.  To him, his
model is  a shari`ah-compliant one because  : First ,it satisfies the juristic conditions of tamlik
(personal ownership of the zakat fund )by the poor and needy as they would be the
shareholders of commercial products by virtue of their shares .Second , it guarantees against
the loss and meets it, if  incurred , from its built –up loss reserve account .Lastly ,it fulfils the
condition of  immediacy of zakat disbursement to satisfy the pressing consumption need  of the

112 He proposes  financing projects ,such as education ,vocational training ,rehabilitation facilities  ,small
agricultural and cottage industries ,low cost housing ,heath care etc.For details see Shahatah, Limitation on
The Use of Zakah Funds  in Financing the Socio- economic Infrastructure  of Society  ,pp.70-71
113 Ibid,pp.69-73.

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poor and the needy as it makes arrangement with the prominent outlets to accept their
certificates(Zakat House in Kuwait issues  coupons), representing shares , at a price not less
than their face value when selling them commodities or services .These outlets can redeem
them later on from the zakat centres..114

Farah model

To him, to accomplish the utilization of zakat fund for investment purposes, there is a need
for establishing a special zakat investment banks (bank ithtithmar al-zakawiyyah).This
bank in coordination with zakat departments can conduct financing activities that any other
bank may undertake.  115

Zaki Badawi`s model

To him ,to tackle the issue of  zakat financing , a clear  distinction should be made
between  the utilization of zakat al-fitr and  zakat al-mal.The former should be used for
the urgent consumer  need of  poor and needy ,the latter should be invested in productive
ventures such as textile factories ,machine tools of manufacturing and low cost houses as
long- term solution to overcome the problem of poverty.116

The practical model: the practice of Kuwait Zakat House

 After outlining the theoretical framework for investment oriented disbursement of zakat
fund, it is worthwhile to briefly outline as to what have been happening at the
implementational level in the Muslim countries.  To this end, we refer to the practice by
Kuwait Zakat House as an example117.

Kuwait Zakat House is a government institution .It has an independent budget, and was
established by Law No.5 in 1982.  Its aims at collection and distribution of zakat fund
and other donations and spending them according to the Shari`ah principles.  In this
pursuit, its investment oriented approach to  zakat disbursement are as follows:118

i. It keeps zakat fund in two types of account with the bank, namely current and

saving accounts .Its earning on saving accounts increases the original fund
deposited with the bank.

ii. It provides free interest loan to people in need of money and secure its
repayment by way of installments.

114Muhammad Anwar ,``Financing Socio-economic Development with Zakat Funds ``in
Journal of Islamic Economics, Vol. 4, 1 & 2, July 1995, 17-18
115 Farah , , al-Tawjih al-Istithmari li al-Zakat,pp.19-23
116  Zaki Badawi ,`` Zakat - A New Source of Development Finance`` in Islamic Banker: News
and Analysis of Islamic Banking, Finance and Insurance, Issue: 4, March 1996, 18-19
117 It is regarded as a successful experience so far .see Anwar ,``Financing Socio-economic
Development with Zakat Funds ``in Journal of Islamic Economics, Vol. 4, 1 & 2, July 1995, 17-18
118 al-Ajeel ,``A Study On The Activities of Zakah Institutions That Are  Based On Non-Compulsory
Payment of Zakat`,pp.10-30

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iii. It finances the vocational training for   capacity building of people capable of
becoming productive citizens (under a scheme called, productive
rehabilitation scheme).  It sponsors poor students` education by offering them
interest free loans.

Conclusion and recommendation

The central points covered in this paper were two:  First, a review of the available
literature on debate about adjusting certain features of zakat jurisprudence .Second, the
implications of such debates for banking in conjunction with the utilization of zakat
revenue for financing.

As far as the first issue is concerned, the paper argued and concluded that:  There are
parts of zakat laws than can be reviewed and there are other aspects that are not amenable
to human extrapolation.  On the renewable part ,we argued and agreed with the extension
of zakat   base to include all economic goods and services of our time .We also agreed
that   today’s fixed assets is a  growing wealth in  the  economic sense and not in the legal
sense as defined by the classical jurists,  thus it has to be zakatable.We also  favor the
fresh understanding of deductible debts as today even most  wealthy people are not free
of  running debts of some kind .  On the fixed parts of the law  , such as nisab and  rate
we beg to differ with modern views  as they represent the permanent features of zakat as
an act of  `ibadah .To augment the zakat revenue ,we alternatively ,fully support the idea
of zakat financing as detailed in this paper .

And as for  the second issue ,the paper concludes that zakat  poses challenges as well as
opportunities for Islamic banking and finance .On the challenge side ,zakat has  to find its
way to banks as far as its enforcement  is concerned .On the opportunity side ,for the
zakat to realize its socio-economic goals of effectively alleviating poverty ,its financing
potential needs to be realized beyond what has been practiced so far .

As such, we recommend the following:

i. the states should make the necessary legislative changes in tandem with the
new ijtihad on fiqh al-zakat to practically enable the banks to fulfill the
obligation of zakat on behalf of both their customers and share holders .For
instance, allowing banks tax-rebates similar to the one accorded to
employment zakat.This requires amendment of certain laws, such as Inland
Revenue Law in Malaysia.

ii. The banks in coordination with the zakat administration department ,be it a
Ministry or State Religious Councils as is the cased in   Malaysia  ,should
explore the possibility of financing  the zakat fund ,beyond its safe-keeping
(as suggested models we referred  in this study may not well augur with the
legal scenario in Malaysia).

 25

Theoretical foundation of zakat

3. The ratio of zakat

Some jurists held that before assessing the zakat ,two requirements of the zakat payer must be subtracted from his zakatable income before deciding as to whether he has to pay any zakat . They are :

Issued to be revised

Growth as the base of Zakatability

What should be the nisab today ?

Revision of the rate

What to exempt?

 Implications for Banking and Finance

Nature and function Islamic banking

Mode of payment

Zakat on saving and current accounts