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Zakat’s role in diminishing poverty

  • Published at 12:00 am May 27th, 2019
Poverty
Photo: SYED LATIF HOSSAIN

With the right amount of commitment, Zakat can help alleviate poverty

Ramadan has become the symbol of humility and being able to withstand pain and hunger while helping others in their time of need. This month includes Laylat-ul-Qadr when the Qur’an-al-Karim was revealed through our Prophet. It is in this environment that nearly two billion Muslims enter Ramadan to reconnect with God through abstinence, praying extra dedications at home and mosques, and seeking forgiveness for any trespasses.

We need to understand that through this month the Creator is reminding His Creation that all of you need to be together.

This matrix that seeks justice and equality is significantly brought forward through the observance of Zakat -- a religious obligation or tax. Zakat, one of the Five Pillars of Islam, is considered as a compulsion for all Muslims who meet the necessary criteria of wealth.

Zakat is based on income and the value of all of one’s possessions It is customarily 2.5% (or 1/40) of a Muslim’s total savings and wealth above a minimum amount known as nisab. The collected amount of Zakat should be paid to the poor and the needy. Today, in most Muslim-majority countries, Zakat contributions are voluntary; but in some other Islamic countries, Zakat is mandated and collected by the state. 

Zakat is given for the sake of salvation and that those who give Zakat can expect a reward from God in the afterlife, while neglecting to give Zakat can result in damnation. Zakat is consequently considered part of the covenant between God and a Muslim. 

According to Islamic scholars, the amount of Zakat to be paid by an individual depends on the amount of money and the type of assets the individual possesses. The Qur’an does not provide specific guidelines on which types of wealth are taxable under the Zakat, nor does it specify percentages to be given. 

 Zakat is additionally payable on agricultural goods, precious metals, minerals, and livestock at a rate varying between 2.5% and 20%, depending on the type of goods. 

Zakat in these countries is usually payable on assets continuously owned over one lunar year that are in excess of the nisab, a minimum monetary value. There is however lack of agreement on this matter.

Islamic scholars have traditionally identified the following categories of Muslim causes to be the proper recipients of Zakat: Those living without any means of livelihood; those who cannot meet their basic needs; those sympathetic to or expected to convert to Islam.

There is, however, consensus that Zakat should not be given to one’s own parents, grandparents, children, grandchildren, spouses, or the descendants of the Prophet (pbuh).

It would also be worthwhile to note here that Muslim scholars disagree on whether Zakat recipients can include non-Muslims. Islamic scholarship, historically, has taught that only Muslims can be recipients of Zakat. However, in the past few decades, some scholars have argued that Zakat may be paid also to non-Muslims after the needs of Muslims have been met, finding nothing in the Qur’an or Sunna to indicate that Zakat should be paid to Muslims only.

There is the more practical aspect of using Zakat as a means to remove widespread poverty from among the Muslim countries. Collecting Zakat and using this as a humanitarian aid factor can definitely help the ultra-poor or those affected by climate variability or floods or cyclones. It could also help to create better educational and health opportunities.

If carried out carefully and with religious commitment, and political will, then it can be effective in macro-economic terms. It is true that Zakat has so far failed to relieve large-scale poverty among Muslims in most Muslim countries, but Malaysia, Gambia, Nigeria, and Indonesia are giving special attention to this. We need to wait and see what happens. λ

Muhammad Zamir, a former Ambassador, is an analyst specialized in foreign affairs, right to information and good governance, can be reached at [email protected]