Towards A Unified Zakat System

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In The Name of God the Merciful the CompassionatePermitting the people of Al-Qassim to collect and distributethe Zakat on properties themselves..From Abdul Aziz Bin Abdul Rahman Al-FaisalTo Our Son Abdallah Bin Abdul Aziz Bin Mussa'd -Peace, Mercy and the Blessings of God -be upon you. You already know thatobserving the orders of the Glorious God is a Religious duty. God has imposed on hisworshipers the Zakat which His prophet (God's peace and blessings be upon. him) hasdefined as the third among the five pillars of Islam after the two professions of faithand prayer. To desist from paying Zakat is like preventing heaven from raining, ashas been told by the prophet of God. We order that Zakat on property be collectedfrom all owners of property and nobody is to be exempted. You should select two orthree of the notables under the supervision of the Qadi (Judge) and every Moslemshould pay to them the Zakat due from him, under your's and the Qadi's supervision.For ourselves we are not in need of it, but we have two purposes in mind: first, thatpeople should follow the rituals of God and, second, that the Zakat be distributed tothose who are in need of it from among the poor and destitute people. We hope thatyou will give full attention to enforcing our order and nobody is allowed to deviatefrom paying it.12 Ramadan 1371 H. (516152) Royal Seal
No. 1 7/2/28/577Date: 14/3/1376 H19/10/1956After reviewing income tax regulations approved by Royal Decree No.17/2/28/3321 dated 21 Moharram, 1370 H (2/11/50) and amended by RoyalDecree No. 17/2/28/8955 dated 30 Ramadan 1370 H. (5/7/55) andby RoyalDecree No. 17/2/28/576 dated 14/3/76 H. (19/10/56), and in considering theZakat Orinance issued by Royal Decree No. 17/2/28/8634 dated 29 Jumad II,1370 H (7/4/51) and amended by Royal Decree No. dated 8'-17/2/28/8799Ramadan 1370H (13/6/5f), andHaving taken note of the Council of Ministers' Resolution No. 31 of27/2/76 H.(2/10/56).We decree the Following:Article IThe full amount of Zakat due shall be collected in accordance with the rules ofthe Shariah of Islam from all our Saudi citizens as well as from all Saudicompanies the, partners or shareholders of which are all Saudis, andpartners in companies formed of Saudis and non-Saudis (l)from SaudiArticle IIRoyal Decree No. 17/2/28/8634 of 29/Jumad II, 1370 H. (7/915 1) and RoyalDecree No. 1712t28/8799 of 8 Ramadan 1370 H (13/6/51) shall nolonger beeffective.Article 111This Decree shall be published and enforced as of 1 Moharram 1376(818156). The Council of Ministers shall issue the decisions required for itsimplementation based on proposals by the Minister of Finance.Royal Seal1) Half of the Zakat only was later collected in accordance with the Royal order No. 10079 dated 7/9t76 H. (714/56)furnished to the Department of Zakat and Income tax by letter from H. H. Minister of Finance No. 100011 dated 7/9t76 11.(714157).
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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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This definition also suffers from s
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elationship that a human being must
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The search for lawful wealth is reg
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from place to place and from time t
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Movement towards greater economic a
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3.4.5 Freedom of ownership and acti
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Public ownership is also recognised
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ates in his Code and suggested the
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These last verses clearly show that
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orrower for the period of time the
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choose and what maximises their uti
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eliminated at the outset in Islam.
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aspect of self-interest he or she s
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it can be said that an Islamic gove
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certain circumstances not. to cance
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3.9 Islamic Economics in Practice.A
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deficit for many years. Pakistan an
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It was argued that the goal of well
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economic activities, social and eco
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ChapterfourZakat and its position i
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Although these methods are currentl
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4.1.1 Goals of ZakatMany Muslim sch
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them to contribute positively to th
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een distributed to non-profit Musli
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sectors of the Sunni Islamic sect,
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4.3.2 WealthThe teachings of the pr
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Islam without regard to any debt on
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4.3.2.4 The passage of a yearThe pa
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oken bones, or gouged eyes (Joan, 1
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the total amount becomes due. The d
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example,today is the date that Zaka
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this item should be considered as p
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Prophet's obligations. The amount o
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4.4.4.2 Starting point of Zakat dut
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such as income earned from practisi
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There is a widely known view of Mal
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amount (2.5 percent). In Saudi Arab
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4.5.2 Department of General IncomeE
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He further describes some condition
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year. Zakat is payable on both the
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through proper channels of the Prop
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therefore, make a list of the avera
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unrealised profits should be net of
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Balance Sheet 31-12-19X230-12-XXX13
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literature behind the selection of
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Zakat system supposedly to be appli
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ChapterfiveResearchmethodology5.0 I
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5.2 Research questions5.2.1 Zakat p
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distribution to those deserving it
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egulation, 1988). Companies, using
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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
Page 293 and 294: Most respondents prefer a partnersh
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Page 297 and 298: measurement be re-defined in such a
Page 299 and 300: " Non-monetary elements, which incl
Page 301 and 302: Table 7.1A sample of the recommende
Page 303 and 304: 7.3.2.2 AllowancesThe treatment of
Page 305 and 306: Zakat at 1.5 percent of the base ra
Page 307 and 308: Traditionally, Zakat was paid to th
Page 309 and 310: eason why the survey study covered
Page 311 and 312: should be set up to at least discus
Page 313 and 314: BIBLIOGRAPHYAbbas, F. 1988. "Anivar
Page 315 and 316: Al-Shafi'i,al-Imam, 1987. al-Shafii
Page 317 and 318: Gambling T. and Abdel Karim, R. 199
Page 319 and 320: Kuran, T. 1992. The Economic system
Page 321 and 322: Taylor, T. W., and Evans, J. W. 198
Page 323 and 324: CARDIFF BUSINESS SCHOOLDirectorProf
Page 325 and 326: S2. If the answer to question 1 is
Page 327 and 328: 2. To what extent do you agree or d
Page 329 and 330: i" iii. 5. ijp'ji ý)ij;; -iK.d. 9.
Page 331 and 332: cycL. oll o: ri >ý_='°9 tMýa5l1
Page 333 and 334: G, i7'1 °ßi1 5'° C, .. c ýSý y
Page 335 and 336: e:;.-. roUS pL Ll LLAI L; 111 CIA:
Page 337 and 338: " Royal Decrees and Orders "
Page 339 and 340: ZAKAT REGULATIONS (1)Article I: The
Page 341 and 342: 7- For those who do not keep reliab
Page 343: No: 17/2/28/8799(»Date: 8/9/1370 H
Page 347 and 348: Royal OrderTo: Mohammed Sorour -Riy
Page 349 and 350: No. 6115/1(1)Date: 5/1/1383 H.With
Page 351 and 352: 'Zakat & Income Tax Department Bran
Page 353 and 354: Kingdom of Saudi Arabia.Ministry of
Page 355 and 356: Ministry of Finance & National Econ
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