Towards A Unified Zakat System

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their Zakat personally, on the advice of local Qodat. In1929, the Public Finance Agency was created and Al-Ahssasubmitted to the authority of this agency. In 1932 theagency was converted into the Ministry of Finance.The Department of Zakat and Income was established andauthorised to supervise the collection of income tax andZakat by the Ministry of Finance decision No. 394, dated14/6/1951. It was originally established in Jeddah, andtransferred to Riyadh in 1970. It now has branches in majorcities of the country. In 1972 it became part of theMinistry of Finance. It is empowered to calculate and levythe Zakat without exception (Al-Sultan, 1997).IIn 1963 the money had to be submitted to the Social SecurityInstitution but, in 1965, this institution was dissolved. Itwas made known that the collected Zakat must be paid intothe account of the general treasury of the government. Also,the Ministry of Finance was ordered to open a separateaccount for this money so that it could be spent along withthe extra funds which the government assigns for socialsecurity purposes. In 1965, the Social Security Departmentwas established, according to Article 20 of the SocialSecurity Regulation. This department was created as part ofthe Ministry of Labour and Social Affairs, with branch48
offices throughout the Saudi Kingdom. These offices obtainedinformation about the poor, from three sources (its ownbranches, the local governor or leading citizens andcharitable organisations in all Saudi cities), thusproviding the department with information about thefinancial condition of the poor (Attiah, 1986).Saudi and GCC citizens and wholly Saudi or GCC-ownedcompanies pay Zakat (a religious tax). According to thestatistics of the Ministry of Commerce, there are 76 Saudicompanies (6 real estate, 14 agricultural, 31 industrial, 6trades and 19 services). Their total capital is US$15,046.7million. Foreign companies, and companies with foreignholdings that have not obtained exemption under the ForeignInvestment Code, pay tax on their net profits or on theportion of net profits attributable to the foreignshareholding. Net profits are calculated by making allowancefor business expenses and depreciation, while capital gainsare also included in gross profits (Farhoud and Ibrahim,1986).Islamic banks and charitable organisations in the GCCcountries collect and distribute Zakat without a governmentmandate. Any person can give his or her Zakat to them withadvice from the donor on how to distribute it.49
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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
Page 15 and 16: GLOSSARY OF TERMSFai property acqui
Page 17 and 18: ChapteroneIntroduction
Page 19 and 20: interest investment model, where th
Page 21 and 22: egulating Zakat has been employed a
Page 23 and 24: four countries due to the limitatio
Page 25 and 26: Co-operation Council, location, cli
Page 27 and 28: Chapter seven summarises thefinding
Page 29 and 30: ChaptertwoGeneral background to the
Page 31 and 32: in the following section, various f
Page 33 and 34: have an oil-based economy. Its oil
Page 35 and 36: anking and investment institutions
Page 37 and 38: 2.1.2 KuwaitKuwait is situated at t
Page 39 and 40: 2.1.2.2 Social, Cultural and politi
Page 41 and 42: Saudi Arabia is a monarchy, with st
Page 43 and 44: In addition, Saudi Arabia is also p
Page 45 and 46: important to the everyday life of S
Page 47 and 48: and the city of Abu Dhabi is the ce
Page 49 and 50: 2.1.4.2 Social, Cultural and politi
Page 51 and 52: The Omani economy mainly depends on
Page 53 and 54: In recent years, the government has
Page 55 and 56: sv2ýJbbQr N m N n O h CC o O n h O
Page 57 and 58: 11 percent in 1995. In Kuwait, the
Page 59 and 60: general. All countries, except Qata
Page 61 and 62: with, they all share the same faith
Page 63 and 64: " Agreement on linking the electric
Page 65: 2.4 An example of Zakat regulationA
Page 69 and 70: future is uncertain. In trying to s
Page 71 and 72: ChapterthreePrinciples of Islamic E
Page 73 and 74: and equitable distribution of incom
Page 75 and 76: has two main sources: primary and s
Page 77 and 78: Although various Islamic schools an
Page 79 and 80: Muslim countries such as Pakistan a
Page 81 and 82: This definition also suffers from s
Page 83 and 84: elationship that a human being must
Page 85 and 86: The search for lawful wealth is reg
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
Page 93 and 94: Public ownership is also recognised
Page 95 and 96: ates in his Code and suggested the
Page 97 and 98: These last verses clearly show that
Page 99 and 100: orrower for the period of time the
Page 101 and 102: choose and what maximises their uti
Page 103 and 104: eliminated at the outset in Islam.
Page 105 and 106: aspect of self-interest he or she s
Page 107 and 108: it can be said that an Islamic gove
Page 109 and 110: certain circumstances not. to cance
Page 111 and 112: 3.9 Islamic Economics in Practice.A
Page 113 and 114: deficit for many years. Pakistan an
Page 115 and 116: 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
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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
Page 353 and 354:
Kingdom of Saudi Arabia.Ministry of
Page 355 and 356:
Ministry of Finance & National Econ
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