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Islamic taxes are taxes sanctioned by Islamic law. [1] They are based on both "the legal status of taxable land" and on "the communal or religious status of the taxpayer". [1] Islamic taxes include zakat - one of the five pillars of Islam. Only imposed on Muslims, it is generally described as a 2.5% tax on savings for charity.
Historically, the jizya tax has been understood in Islam as a fee for protection provided by the Muslim ruler to non-Muslims, for the exemption from military service for non-Muslims, for the permission to practice a non-Muslim faith with some communal autonomy in a Muslim state, and as material proof of the non-Muslims' allegiance to the Muslim ...
Under compulsory systems of zakat tax collection, such as Malaysia and Pakistan, evasion is very common and the zakat (alms tax) is regressive. [18] A considerable number of Muslims accept their duty to pay zakat, but deny that the state has a right to levy it, and they may pay zakat voluntarily while evading official collection. [84]
Zakat can be used to finance a jihad effort in the path of Allah. Zakat money should be used, provided the effort is to raise the banner of Islam. [41] [42] Additionally, the zakat funds may be spent on the administration of a centralized zakat collection system. Historically, Abul A'la Maududi championed the concept of Zakat. [43]
Beneficiaries of zakat include orphans, widowed, poor muslims, debt-ridden, travelers, zakat collectors, new converts to Islam, Islamic clergy. [9] [10] [11] Zakat is prescribed to cleanse the individual's wealth, heart, and baser characteristics in general, and to replace them with virtues. [12]
All Muslims who live above the subsistence level must pay an annual alms, known as zakat. In the modern sense, this would be Islam's equivalent to US Social Security or UK National Insurance. This is not charity, but rather an obligation owed by the eligible Muslim to the poor of the community.
Non-Muslims were required to pay the jizya, an administrative tax on non-Muslims analogous to zakat (a Muslim only tax). The Jizya was applied only to young able-bodied adult males and exempted non-Muslims from military service. The Muslim state would then be responsible for the administration & security of the Non-Muslims. [65]
The word sadaqa is interchangeably used with zakat and nafaqa in some contexts, [3] but while zakat is obligatory, sadaqa usually refers to voluntary donations. [ 1 ] Zakat is a required minimum contribution by Muslims in terms of money and property or goods that can help Muslims who need assistance, while sadaqah can be in the form of money ...