Report on Taxation and Zakat
7 Pages1511 Words335 Views
Added on 2020-05-04
Report on Taxation and Zakat
Added on 2020-05-04
ShareRelated Documents
Running head: ZAKATTaxation and ZakatName of the studentName of the universityAuthor note
1ZAKATIntroductionPoverty has been an issue since the beginning of civilization and has become a dominantforce of instability since the advent of monarchy and democratic republics. Poverty can bedefined simply as a situation of scarcity or lack of adequate wealth, capital or any other kind ofsignificant material possessions that would aid human survival, it is a multifaceted concept. In2000, the UN organized an event that gathers the leaders of the nations to sign the “MillenniumDevelopment Declaration”. On that day, these world leaders pledged to work together to achievethe “Millennium Development Goals” by the year 2015, where one of the objectives is tosignificantly reduce the number of extreme poverty and hunger globally (United Nations, 2012).Similarly, a year before, International Monetary Fund (hereafter, IMF) and World Bankintroduced the Poverty Reduction Strategy (henceforth, PRS) that outline a comprehensivecountry-based strategy to significantly reduce poverty.Zakat and its relation to povertyLinguistically,Zakat stands for growth, purity, blessing and uprightness (Hassan, 2010).In Syariah, Zakat is the obligation that an individual has to allocate a certain proportion of wealtheach year to the assigned people. Zakat is the second major worship in the religion of Islamwhich is usually listed right after prayers from sequences in Quran and Sunnah. Consistent withthe brotherhood concept in Islam, Muslims were strongly encouraged to look after the poor intheir community (Yaacob et al, 2013). Thus, in 9AH, the obligation to pay zakat on wealth wasreceived by the Prophet Muhammad.History proves that zakat is an effective tool to alleviate poverty. During the period of Umarbin Al Khattab and Umar bin Abdul Aziz poverty was completely eliminated, though with the
2ZAKATadvent of European nations and their conquests, the Zakat institutions gradually began to decline(Abdulai and Shamshiry, 2014). In Islam, doing something for the poor and needy is a crucialresponsibility, the act of gifting something to the poor and needy without expecting anything inreturn is called ‘Shadaqah’, which can also be translated to Zadak as stated in the sunnah, it playsa crucial role in affecting people emotionally by:1.Purifies ones heart and soul and frees it from thoughts of selfishness and greed (Shirazi,2014). It also amplifies the feeling of sympathy for the poor and the needy. 2.For the ones who are on the receiving end, it would free their hearts from the sins of envyand hatred, and fill it with pure satisfaction instead fostering goodwill and understanding(Bakar and Rashid, 2010). This glorifies the Islamic principle of brotherhood even more. The socio economic benefits of Zakat would be:1.Equal economic distribution of wealth amongst masses. 2.Improves living and social conditions of the less privileged sections of society andreduces sentiments of inequality. The connection of taxes and Zakat with poverty alleviationTax refers to a sum of money that is charged or levied by authorities from the general public inorder to meet the government’s general expenses (Wahab and Rahman, 2011). It is taken withthe general motive of making the country and the people living in it more prosperous. It isimposed by the law on every entity in the country regardless of their religion. Zakat, on the otherhand is an Islamic principle and is singularly driven by religion, unlike the monitory aspect oftaxation. Zakat being a form of belief, it has several differences with that of taxation, being:
End of preview
Want to access all the pages? Upload your documents or become a member.