Islamic taxes, also known as Zakat and Sadaqah, are essential pillars of Islam that promote social welfare and economic justice.
These taxes are mandatory for all Muslims who meet the specific criteria for payment, and they are considered an act of worship that purifies one’s wealth and earns a divine reward.
Zakat is an obligatory tax that every Muslim who meets the specific criteria must pay. It is calculated at a rate of 2.5% on the net worth of an individual’s savings and investments held for a lunar year. The collected funds are used for various charitable purposes, such as helping the poor, supporting orphans, and providing healthcare.
Nisab is the minimum threshold of wealth an individual must have before Zakat becomes obligatory. This threshold is calculated based on the value of gold and silver and is adjusted according to inflation.
Sadaqah is a voluntary donation that Muslims can give at any time and in any amount. This type of tax is not obligatory but is highly encouraged in Islam as it is considered a means of attaining divine reward.
Fitrana is a compulsory tax every Muslim pays before the Eid al-Fitr prayer. The amount is calculated per person to help the poor and needy celebrate Eid al-Fitr.
Ushr is a tax on agricultural produce that farmers pay. It is calculated at 10% of the net harvest after deducting expenses.
Khums is a tax on the wealth derived from various sources such as business profits, mineral resources, and treasure troves. It is calculated at a rate of 20% on the net value of such wealth and is used for charitable purposes.
Jizyah is a tax historically paid by non-Muslims living under Islamic rule. The tax was collected in exchange for protection provided by the Islamic government.
Kharaj is a land tax historically collected from non-Muslims who owned land under Islamic rule. The tax was collected in exchange for protection provided by the Islamic government.
Qard al-Hasan is an interest-free loan that Muslims can give to other needy Muslims. The loan is considered a form of Sadaqah and is expected to be repaid when the borrower can.
Waqf is a donation of property or assets dedicated to charitable purposes. The donated property is held in trust, and its income is used for various philanthropic goals, such as building mosques, schools, and hospitals.
Islamic taxes play a significant role in promoting social welfare and economic justice. These taxes are considered an act of worship and are mandatory for all Muslims who meet the specific criteria. By paying Islamic taxes, Muslims purify their wealth and earn divine rewards while contributing to the betterment of society.