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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] In discretion-based systems of collection, studies suggest zakat is collected from and paid only by a fraction of Muslim population who can pay. [18]
Only imposed on Muslims, it is generally described as a 2.5% tax on savings to be donated to the Muslim poor and needy. [ 1 ] [ 2 ] It was a tax collected by the Islamic state. jizya - a per capita yearly tax historically levied by Islamic states on certain non-Muslim subjects— dhimmis —permanently residing in Muslim lands under Islamic law ...
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 ...
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]
Another statement of the Islamic banking theory of finance is: "Money has no intrinsic utility; it is only a medium of exchange." [102] [103] Other restrictions include Islamic banks are to collect zakat (obligatory religious alms giving) from customers' accounts – at least according to some sources. [99] [104]
Because the individual must pay zakat on the net wealth, wealthy Muslims are compelled to invest in profitable ventures, or otherwise see their wealth slowly erode. Furthermore, means of production such as equipment, factories and tools are exempt from zakat, which further provides the incentive to invest wealth in productive businesses. [ 33 ]
In Islam, zakat is a form of compulsory alms-giving, and a religious obligation for those Muslims who are financially affluent. [37] They are required to pay one-fortieth (2.5%) of their total income or money each year to those Muslims who are poor and helpless.
While frowned upon, professions other than fighting jihad are necessary for the running of the state. Those who take up these professions must pay zakat, usually a 2.5% tax on an individual's total assets. Islamic State has also put in place the 'ushr tariff on imports and exports from their territory. All of these taxes imposed by Islamic ...