Towards A Unified Zakat System

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Borrowed wealth (money) is considered wealth that is in thepossession of its owner as long as the loan is to an ableparty and the owner can recover that wealth (Al-Qaradawi,1986).With regard to Zakat on wealth when its owner is indebted;should this debt be subtracted from the total debt inarriving at the Zakat base or not. Muslim scholars, likeImam Ahmad, distinguish between two types of wealth:visible and invisible. They define visible wealth as thewealth that cannot be hidden, such as animals andagriculture wealth. Invisible wealth is wealth that is notapparent to everybody. They include easily hidden or notreally apparent wealth, such as trading activities andownership of silver and gold (Al-Tayar, 1987). Mostjurisprudence experts, like Imam Ahmad, say that debtshould be subtracted from invisible wealth when calculatingthe Zakat base (which is the total net amount that resultsfrom pooling together all the individual forms of wealth).At the same time, the debt should not be subtracted fromvisible wealth. They base their judgement on theirconsidered belief that the hearts of the poor arepassionate toward visible wealth, and that Zakat wascollected from this type of wealth during the early days of112
Islam without regard to any debt on this type of wealth.Most contemporary scholars, however, disagree with drawingsuch distinctions and say that justice and equality aremore important than any unreal distinctions between wealthtypes. Debt should, therefore, be subtracted whencalculating the Zakat base in relation to all types ofwealth (Shattah, 1977). This can be expressedmathematically as follows.w= v+ Iv .......(1)Where:W= WealthV= VisibleIV = Invisible not subject to ZakatV= [An + Ag + Qc + SC + Ta + Mn]......(2)Where:An = outcome of animals,Ag = outcome of agriculture products,QC = outcome of gold,SC = outcome of silver,Ta = outcome of trading assets,Mn = outcome of minerals.Combining equation 1 with equation 2 results in equation 3.Zv = X0 (Anq + Agq + Gq + Sq + Taq + Mnq) + IV.......(3)Where:Zv the amount of Zakat on visible wealthXo= the coefficient of Zakat as percentages. It113
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Towardsa unified system ofZakat acc
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ACKNOWLEDGEMENTSIN THE NAME OF ALLA
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PAGINATION ERROR INORIGINALTHESIS
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ContentsPageDeclarationiDedicationi
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4.4.1.1 Zakat on pastoral animals 1
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6.2.5 The percentage of Zakat thats
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List of tablesPageTable 2.1 Economi
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GLOSSARY OF TERMSFai property acqui
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ChapteroneIntroduction
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interest investment model, where th
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egulating Zakat has been employed a
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four countries due to the limitatio
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Co-operation Council, location, cli
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Chapter seven summarises thefinding
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ChaptertwoGeneral background to the
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in the following section, various f
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have an oil-based economy. Its oil
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anking and investment institutions
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2.1.2 KuwaitKuwait is situated at t
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2.1.2.2 Social, Cultural and politi
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Saudi Arabia is a monarchy, with st
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In addition, Saudi Arabia is also p
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important to the everyday life of S
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and the city of Abu Dhabi is the ce
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2.1.4.2 Social, Cultural and politi
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The Omani economy mainly depends on
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In recent years, the government has
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sv2ýJbbQr N m N n O h CC o O n h O
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11 percent in 1995. In Kuwait, the
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general. All countries, except Qata
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with, they all share the same faith
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" Agreement on linking the electric
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2.4 An example of Zakat regulationA
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offices throughout the Saudi Kingdo
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future is uncertain. In trying to s
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ChapterthreePrinciples of Islamic E
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and equitable distribution of incom
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has two main sources: primary and s
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Although various Islamic schools an
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Muslim countries such as Pakistan a
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Page 87 and 88: from place to place and from time t
Page 89 and 90: Movement towards greater economic a
Page 91 and 92: 3.4.5 Freedom of ownership and acti
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Page 113 and 114: deficit for many years. Pakistan an
Page 115 and 116: It was argued that the goal of well
Page 117 and 118: economic activities, social and eco
Page 119 and 120: ChapterfourZakat and its position i
Page 121 and 122: Although these methods are currentl
Page 123 and 124: 4.1.1 Goals of ZakatMany Muslim sch
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Page 127 and 128: een distributed to non-profit Musli
Page 129 and 130: sectors of the Sunni Islamic sect,
Page 131: 4.3.2 WealthThe teachings of the pr
Page 135 and 136: 4.3.2.4 The passage of a yearThe pa
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Page 139 and 140: the total amount becomes due. The d
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Page 145 and 146: Prophet's obligations. The amount o
Page 147 and 148: 4.4.4.2 Starting point of Zakat dut
Page 149 and 150: such as income earned from practisi
Page 151 and 152: There is a widely known view of Mal
Page 153 and 154: amount (2.5 percent). In Saudi Arab
Page 155 and 156: 4.5.2 Department of General IncomeE
Page 157 and 158: He further describes some condition
Page 159 and 160: year. Zakat is payable on both the
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Page 169 and 170: literature behind the selection of
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Page 173 and 174: ChapterfiveResearchmethodology5.0 I
Page 175 and 176: 5.2 Research questions5.2.1 Zakat p
Page 177 and 178: distribution to those deserving it
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Page 181 and 182: 5.2.5 Zakat regulationRegulating Za
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capital owners (Article 70).The mea
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authorities and securities regulato
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5.2.8 Variations in accounting meas
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applicability to part of the capita
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then they must be discounted since
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as well as with the standard for th
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5.2.10 Percentage of ZakatWhen Zaka
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5.2.12 Zakat location in the annual
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Zakat payer are added to the profit
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ich. This is what Islam stands agai
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eing to make it Islamic, strong, gr
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the present study would have been p
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a wide geographical area, involving
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The fifth and last part sought the
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academics, government officials, in
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Kuwait. Some individual investors c
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out of 80 (31 percent) and the Unit
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important, or agree to disagree. Th
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KW=12LNNk2 I+ 1) j=1Ellýj-3(N + 1)
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ChaptersixStatisticalanalysisofthes
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analysis of respondents background
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Education and age are not the only
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years. Twenty-three percent reveale
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6.2 Major results6.2.1 Zakat paymen
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Al-Sultan (1997) who argued that Mu
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Department of Zakat, but not to the
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ox. It is highly likely that the re
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to the national banks where the mea
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difference in means is highly insig
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collect and distribute only 1.25 pe
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The ranking of institutions' means
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Firstly, occupation seems to affect
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It was, however, roughly find two f
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collection), as the chi-square stat
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financial statements such as profit
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like to be on the safe side as far
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It is uncontested that the degree o
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espondentsseem to share some doubt
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score to themselves on the suggesti
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statistics were not significant at
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Secondly, Gulf countries have not y
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Table 6.13(b)Reasons behind low lev
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Alms (Zakat) are for the poor, the
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Table 6.14(b) Appointment and pay f
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five out of seven items, suggesting
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discussed earlier remains unchanged
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4.61. The opinion of accounting fir
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6.5 SummaryThis chapter has empiric
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ChaptersevenSummaries,conclusionand
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7.1.2 Chapter twoThis chapter provi
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(profit) with the borrower. Any dea
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countries, Zakat is paid by all tho
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Another advantage is the accumulati
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This survey reveals that almost 40
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of the total Zakat amount due. Over
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Most respondents prefer a partnersh
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measurement and disclosure of Zakat
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measurement be re-defined in such a
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" Non-monetary elements, which incl
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Table 7.1A sample of the recommende
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7.3.2.2 AllowancesThe treatment of
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Zakat at 1.5 percent of the base ra
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Traditionally, Zakat was paid to th
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eason why the survey study covered
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should be set up to at least discus
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BIBLIOGRAPHYAbbas, F. 1988. "Anivar
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Al-Shafi'i,al-Imam, 1987. al-Shafii
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Gambling T. and Abdel Karim, R. 199
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Kuran, T. 1992. The Economic system
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Taylor, T. W., and Evans, J. W. 198
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CARDIFF BUSINESS SCHOOLDirectorProf
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S2. If the answer to question 1 is
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2. To what extent do you agree or d
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i" iii. 5. ijp'ji ý)ij;; -iK.d. 9.
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cycL. oll o: ri >ý_='°9 tMýa5l1
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G, i7'1 °ßi1 5'° C, .. c ýSý y
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e:;.-. roUS pL Ll LLAI L; 111 CIA:
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" Royal Decrees and Orders "
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ZAKAT REGULATIONS (1)Article I: The
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7- For those who do not keep reliab
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No: 17/2/28/8799(»Date: 8/9/1370 H
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No. 1 7/2/28/577Date: 14/3/1376 H19
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Royal OrderTo: Mohammed Sorour -Riy
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No. 6115/1(1)Date: 5/1/1383 H.With
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'Zakat & Income Tax Department Bran
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Kingdom of Saudi Arabia.Ministry of
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Ministry of Finance & National Econ
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