In Islam Zakat can be conceptualized as redistribution of wealth which is integral to Islamic equity and justice. It is an obligatory charity and one of the five pillars of the religion, with the other four pillars being the declaration of faith, the daily prayers, fasting during the month of Ramadan, and pilgrimage to Mecca. The last pillar is only required once in one’s lifetime only if they can afford it and are healthy enough to undertake the journey.
As an act of almsgiving practiced once a year, Muslims often choose Ramadan or the beginning of the Islamic New Year to give zakat. There are two types: Zakat-ul-maal a form of tax imposed by God on the wealthy for the benefit of the poor and needy, and Zakat-ul-fitr, paid to the poor and needy before the end of Ramadan. Neither type of zakat can be likened to tithing since neither is paid to the mosque. The mosque may collect zakat but may not use it for mosque related expenses. Any zakat collected by the mosque must be distributed to those who meet the necessary eligibility requirements. There is no other form of tax ordained in Islam.
There are various verses in the Quran that lays down the main objectives of zakat in Islam. For example, in Surah Al-Hashr, Verse 7:
كَي لا يَكونَ دولَةً بَينَ الأَغنِياءِ مِنكُم…
… So that it (wealth) may not be [a benefit] going round and round among such of you as may [already] be rich.
Zakat is to be paid by the head of the family, unless they themselves are poor or needy in which case they’d qualify to receive zakat. The eligibility requirements for potential recipients of either zakat is the same and are specified in Surah Al-Tawba, Verse 60. This verse lists eight types of qualifications each of which may make a person eligible to receive Zakat:
إِنَّمَا الصَّدَقاتُ لِلفُقَراءِ وَالمَساكينِ وَالعامِلينَ عَلَيها وَالمُؤَلَّفَةِ قُلوبُهُم وَفِي الرِّقابِ وَالغارِمينَ وَفي سَبيلِ اللَّهِ وَابنِ السَّبيلِ فَريضَةً مِنَ اللَّهِ وَاللَّهُ عَليمٌ حَكيمٌ
The offerings given for the sake of God are [meant] only for the poor and the needy, and those who are in charge thereof, and those whose hearts are to be won over, and for the freeing of human beings from bondage, and [for] those who are overburdened with debts, and in God’s cause, and [for] the wayfarer: [this is] an ordinance from God – and God is all-knowing, wise.
The amount of Zakat to give every year is also regulated in Islam. For instance, Zakat-ul-maal is mandatory on a yearly basis on any wealth whose value is above a certain minimum amount. In today’s money the minimum amount one needs to have to qualify to pay zakat is around $2000. The zakat rate for Liquid assets that are more than $2000 is 2.5%. If a Muslim has owned, for example, $5000 for a year, they are obligated to pay on it: ($5000-$2000) x 2.5% = $75. Traditionally the amount of zakat-ul-fitr due was set by the Prophet at about two dry quarts of staple foodstuffs such as wheat or dates. When expressed in today’s dollars, the amount due this year in the U.S. is $12 per person in the family. Other types of assets (for example livestock) have their own rates and can be paid in kind.
In the U.S., mosques often facilitate the collection and distribution of zakat-ul-fitr and zakat-u-maal. Most American Muslims pay their zakat at their local mosque. Others send their zakat to charity organizations that collect and distribute zakat to those in need in the U.S. and across the world.
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Dr. Yusuf Nur is an Associate Professor of strategic management and international business at Indiana University Kokomo.
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