Islam regards all wealth, as belonging to God and it is an amanah (a trust that is entrusted to the individual) from Allah. We will have to account for the wealth that Allah has entrusted to us in this life and hereafter.
One may accumulate as much as one pleases as long as such means do not violate the law of law. Wealth gathering is a legitimate activity as long as it entail theft, cheating, coercion, riba(usury), harming others.
Indeed, the pursuit of wealth is one of the mans primal concerns and demands for survival (consisting of food, shelter and clothing). Wealth gathering is vital for living, but it must be subjected to the moral law. Without this law, human life sinks to the level oriented around money and could lead to moral decadence.
Even if the moral law has been strictly observed in every step of the process of acquiring wealth, our wealth still needs justification on another level and this is where the institution of wealth sharing or Zakah. One of Islam tenet is that wealth, once acquired ought to be shared with others in the same proportion. This is the requirement of charity and it is as old as humanity and always regarded as high moral value.
a) To purify the physical well being and the soul of a man by inhibiting selfishness and materialistic from rooting in the heart of the rich, as well as spiritual training in one to create a noble, good and caring person, to others.
d) To assure the needy that their fellow brothers will not passively see them suffer misfortune.
No Zakah is due on property intended for consumption, such as houses, gardens, clothing, or furniture. Jewelry of gold, silver. Taxable property is that which is intended for production, whether industrial, agricultural or commercial.
According to Malaysian standard, even though jewelries which are used by females will not be imposed to Zakah but, one must bear in mind that if a women wears jewelries which overall cost of the jewelries is higher than RM5000 i.e normal standard usage of jewelries for a woman in Malaysia, she has to pay Zakah (2.5 %) from the additional amount which is above the standard.
Zakah is not an indiscriminate tax on all properties. Assessment of Zakah must take into consideration the net income produced by the property in question. If in a year, the company suffers a loss, no Zakah is levied on the property concerned.
A reasonable amount necessary for the owner and his dependents subsistence must be deducted from the assessment.
Shares which are permissible to buy and own may be purchased for either holding them and expecting their dividends or for participating in the management of the company, or for using them as tradable objects waiting for a good opportunity to realize a capital gain and sell. In this case, one is to pay Zakah at the same rate and net asset value on the due date of Zakah.
a. The view of the majority, which came in a resolution of the OIC Fiqh Academy, maintains that one has to calculate the Zakah able part of the value of the stock, from the companys balance sheet and pay Zakah on it in the due date at the rate of 2.5%. The Zakah able part is: cash+receivables+inventories of goods in process and ready for sale-short term debts.
b. The minority view, states that this investment is similar to trading in stocks, in the Shariah meaning of the word. Accordingly, the owner has to pay Zakah at the rate of 2.5% on the market value on the due date.
c. The third view is a subset of the first one; it actually adds to the first one that if it is difficult to calculate Zakah from the balance sheet, one may pay 10% on the net income of the stock, in analogy with agriculture. Actually, there is no strong and logical support in Shariah for this opinion.
a) Losing Allahs blessings over his/her properties.
b) Lead to greediness in oneself to accumulate as much wealth as one could without ignoring the lawfulness of the sources of income in the eyes of Islam.
c) Widening the gap between the rich and the poor. In this case, the rich becomes richer and the poor remains poor or even poorer without any help to improve the situation. As a result, this leads to social illnesses and civil crimes, which will even out the harmony and tranquility life in society.
d) The existence of envy and hatred between the rich and the poor.
e) The wealth, which has not been purified with Zakah, will bring disasters to its owner in the hereafter.
This Ramadhan al-Mubarak is a perfect time to be reminded of the duty to pay Zakah al-Fitr, which is obliged to all Muslims of man, woman, young and old. Accordingly, cash value of one saa (or one gantang or 2.3 kg) can be paid as Zakah al-fitr and it equivalent to a very small amount of money (below RM 5.00). It must be settled before the Idul Fitr sunnah prayer is performed. In the event of later than this, it will not be regarded as Zakah fitrah anymore but is merely regarded as an ordinary sadaqah. Therefore, Muslims should not hesitate in carrying out this duty at the due time in which will also helps to enlighten the Hari Raya celebration of the unfortunate members in society.
* The writer holds a M.A(Hons) in Shariah from Jordan and he is a Shariah Compliance Manager, RHB Islamic Bank Berhad.