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Fatwa on the Payment of ZAKAT Using Dinar and Dirham (Part 1)

21 Sep

By Umar Vadillo

‘Establish the prayer and pay zakat and obey the Messenger
so that perhaps you may gain Mercy.’
Qur’an 24:54
(and 28 other similar references)

‘The men and women of the believers are friends of one another.
They command the right and forbid the wrong,
and establish the prayer and pay zakat,
and obey Allah and His Messenger.
They are the people Allah will have Mercy on.
Allah is Almighty, All-Wise.’
Qur’an 9:72

‘Take sadaqa from their wealth
to purify and cleanse them.’
Qur’an 9:104

‘Collected sadaqa is for:
the poor,
the destitute,
those who collect it,
reconciling people’s hearts,
freeing slaves,
those in debt,
spending in the way of Allah,
and travelers.
An obligation imposed by Allah.
Allah is All-Knowing, All-Wise.’
Qur’an 9:60

“Islam is based on five: testifying that there is no god but Allah and that Muhammad is the Messenger of Allah, establishing the prayer, paying the zakat, the fast of Ramadhan and the Hajj.”

Ibn ‘Abbas said, “The Messenger of Allah, may Allah bless him and grant him peace, sent Mu’adh to Yemen and said, ‘Call on them to testify that there is no god but Allah and that I am the Messenger of Allah. If they obey you in respect of that, then tell them that Allah has made the five prayers obligatory for them every night and day. If they obey you in respect of that, inform them that Allah has made it obligatory for zakat to be taken from their property and given to their poor.’”

Ibn ‘Umar reported that the Messenger of Allah may Allah bless him and grant him peace, said, “I have been commanded to fight people until they testify that there is no god but Allah and that Muhammad is the Messenger of Allah and establish the prayer and pay the zakat. If they do that, their lives and property are protected from me except for the right of Islam; and their reckoning is up to Allah.”

1 The Present Mishandling of Zakat

These ayats and hadiths referring to zakat are accepted by every Muslim. No Muslim denies the central role of zakat in Islam as an indispensable pillar of equal importance to the prayer, denial of which is tantamount to unbelief. Indeed, Allah couples prayer and zakat together in the Qur’an nearly thirty times and the mufassirun say that this indicates that the two actions are interdependent, meaning by that that your prayer is not acceptable unless your payment of zakat has been properly discharged and vice versa. Yet in spite of its pivotal nature and people’s nominal affirmation of it, it is absolutely clear that the vast majority of Muslims do not give zakat the prime importance it is due.

Most Muslims realise that they should pay something called zakat. Some think that they have fulfilled their obligation in full by paying their zakat al-fitr at the end of Ramadan. Many more know that zakat has something to do with two and a half percent though few know exactly of what. A large number even attempt to pay zakat, though usually in a very haphazard way, and, at best, it is considered in the light of an obligatory act of private charity. People certainly do not treat zakat as if the validity of their prayers depended upon its correct disbursement and many pay no attention to it whatsoever. There are several reasons for this current disregard of zakat.

Foremost among them is the present dislocated political situation of the Muslims throughout the world. As long as the Dar-al-Islam remained a unified political reality the institution of zakat retained its integral role as part of the economic fabric of Muslim society. With the fall of the Khalifate, however, under the treacherous onslaught of Arab and Turkish constitutionalists and nationalists assisted and egged on by their kafir paymasters, and the subsequent dismemberment of the Muslim Ummah, the shari’a lost its central position in Muslim society and one of the major casualties of this was the institution of zakat.

The new post-colonial “Muslim” nation states were all founded upon kafir constitutions. All constitutions in the world are based on three universal pillars that preserve capitalism as the motor of the political and economic system. Those three pillars are:

1.Central Bank
2.Law of Legal Tender
3.National Debt

These three elements are alien to Islam and forbidden by the Sharia. The first one institutionalises the banks even in so-called Islamic constitutions. The existence of the Central Bank, which is the mother of riba institutions in every Muslim country guarantees the preservation in the law, of all other banks. The Law of Legal Tender, is against the fundamental principle of trade in the Shariah, that stands for “a an tarad dim minkum”, that is, [trading] with mutual consent. It is forbidden in Islam to impose any particular merchandise as a means of payment, even the Dinar. The fundamental principle that governs ALL commercial transactions is freedom to choose. Thus the present system of paper money which has no value other than by the compulsion of the State is in direct conflict with the fundamentals of freedom.

Legal Tender Law guarantees that the population is enslaved through inflation to a system of credit money dominated by the banks. The system also preserves the domination of foreign currencies in the international arena. And the Law of National Debt makes every citizen liable to the debt incurred by the State. This, needless to say, not only is forbidden because the debt carries riba, but as a principle making somebody else liable to someone else’s debt has no basis in Islam.

This constitutional model has served to preserve capitalism as the ruling mechanism of our economic life. This inevitably denied zakat its vital fiscal status and turned it into the matter of private personal piety. But zakat is definitively a political matter not a private one. It is a matter of the public sphere not the private sphere. Its collection and distribution are a matter of Muslim governance not private charity. This cannot be overstated because not only has zakat now been removed from the public arena but nearly all the Muslims think that this is the way things should be. This is categorically not the case. Failure to grasp this has been a main contributory factor to the political weakness of the Muslims in the world today.

In one of the ayats from Surat at-Tawba quoted above, Allah, tabaraka wa ta’ala, says to His Messenger, may Allah bless him and grant him peace,

“Take sadaqa from their wealth to purify and cleanse them.”

The word “sadaqa” is used in the Qur’an both in the general sense of all charitable giving and also in certain contexts with the specific meaning of the obligatory act of zakat and the mufassirun are agreed that this ayat can be taken as referring to zakat.

The important point about it in the light of what we have just been discussing is the use of the imperative tense in the verb “take”. Allah ta’ala orders his Messenger to take zakat from the people. He could have ordered people to give it, as He does in other ayats. ‘Order people’ in a general sense, to take from what they have, and in this specific instance where zakat is intended, He orders it to be taken.

Confirmation that this was the generally understood meaning of the ayat can be gleaned from the fact that after the death of the Prophet, may Allah bless him and grant him peace, the Arabs who refused to pay zakat to Abu Bakr, may Allah be pleased with him, did so on the basis of this ayat, saying that because it was in the singular tense it only referred to the Prophet himself and was, therefore, abrogated by his death. This was of course not applicable since there are many ayats addressed to the Prophet, may Allah bless him and grant him peace, which bear a general significance. The point here, however, is that it was a recognised fact that the nature of zakat is that it is not something left to be given by those who owe it but something which is taken by the leader of the Muslims.

This construction is further strengthened by the famous words of Abu Bakr, the Khalifa of the Muslims, to Umar ibn al-Khattab during the incident referred above when Umar counselled him against fighting the tribes who were refusing to pay zakat. Abu Bakr said, “By Allah, I will fight anyone who makes a distinction between the prayer and zakat. Zakat is the right which is due on wealth. By Allah, if they refuse me a hobbling rope which they used to pay to the Messenger of Allah, may Allah bless him and grant him peace, I will fight them for it!”

The important words for us in the present context from this great statement are “refuse me”. Abu Bakr was obviously not referring to himself here as an individual but as the political leader of the Muslims and by doing so clearly shows the inextricable link between zakat and Muslim governance.

This link is also affirmed in the sources in the hadith quoted above from Ibn Abbas about Mu’adh being sent to the Yemen. Among the instructions he was given by the Prophet, may Allah bless him and grant him peace, are the words,

“Allah has made it obligatory for zakat to be taken from their property and given to their poor.”

The use of the passive tense “to be taken… and given” demonstrably reveals the governmental nature of the institution of zakat both in its collection and its distribution.

It may seem that I am laying a great deal of stress on this point but it is necessary to do so because the organic connection between zakat and Muslim governance has been all but completely lost. It is not that zakat may be collected and distributed by the Muslim authorities, it is that from the very beginning it has been in the very nature of zakat that, that is the case. There is certainly an aspect of zakat whereby it is an individual act of worship, in the words of a well-known definition, “the giving, as an act of piety, of a legally stated portion of one’s wealth to be distributed among those categories designated by Allah in His Book,” and certainly its payment is a purification of the wealth of the payers and a means of reward for them in the Next World just as its withholding is a cause of terrible punishment, but unlike other acts of worship it is inextricably binded with the governance of the Muslim community.

All the books of fiqh of all the schools and all the books of history of the Muslims show that this connection was taken for granted throughout all the centuries of Muslim rule until the present time. Centrally appointed collection and distribution is assumed in all the traditional literature on the subject.

Imam al-Sarakhsi says in his book al-Mabsut:
“Zakat is a right of Allah and is to be collected and distributed by the leader of the Muslims or his appointees. If anyone pays his zakat to anyone else, it does not remove from him the obligation of zakat.”

Imam Malik says in the Muwatta’:
“The distribution of zakat is up to the individual judgement of the man in charge. There is no fixed share for the collector of zakat except as the leader of the Muslims sees fit.”

Imam ash-Shafi’i says in al-Umm about the Qur’anic category, “those who collect it”, that they are those appointed by the Khalifa of the Muslims to collect and distribute zakat.

Imam Ahmad is quoted in the book ash-Sharih ar-Rabbani li Musnad Ahmad as saying, “The khalifa alone has the authority and responsibility to collect and distribute zakat, whether by himself or through those he appoints, and he has the authority and responsibility to fight those who refuse to pay it.”

These are merely four representative examples from literally thousands of other possibilities.
From all this it must be abundantly clear that from its origins that the collection and distribution of zakat was an integral and inseparable function of Muslim governance. All the other pillars of Islam have an interface which connects them with the central authority: the shahadatayn through its explicit acknowledgement of the acceptance of the authority of Muslim governance; the prayer through the official appointment of khatibs to take the jumu’a prayer; the fast of Ramadan for the official announcement of its beginning and end; and the hajj for its appointed leadership.

It is, however, possible for all these rites to be carried out by Muslims who are not being governed according the the shari’a, as the present secularisation of the Muslim world and the many Muslims subject to kafir rule in the world today make plain, though the lack of recognised Muslim authority makes itself painfully felt at the beginning and end of every Ramadan. Only in the case of zakat is this not possible. Zakat cannot be divorced from active Muslim governance.

Once the vital link between zakat and governance has been severed it means that the pillar of zakat, as it has always been understood by all the Muslims throughout the whole history of Islam, has been eliminated. Any pretence of the payment and distribution of zakat in the present circumstances can only be precisely that – nothing more than a well-intentioned pretence. Denial of the integral connection between zakat and central Muslim government necessarily means that the nature of zakat has been altered beyond any recognition from its original function and practice.

Another major factor in the subversion of zakat has been the change in the nature of wealth and money during the last two centuries, which also has more than an incidental connection with the change in the political situation of the Muslims we have just noted. The institution of zakat was originally prescribed for, and within, a human situation in which wealth was measured by the natural factors which had always been considered the gauge of human prosperity and indeed continued to be throughout the world up until the end of the 18th century. Allah ta’ala delineates these things clearly in Sura Al-‘Imran when He says:

“To mankind the love of worldly appetites is painted in glowing colours: women and children, and heaped-up mounds of gold and silver, and horses with fine markings, and livestock, and fertile farmland. All that is merely the enjoyment of the life of this world.”
Qur’an 3:14

In every traditional human society the basic measures of wealth were always land, livestock and gold and silver, and it is these things on which zakat on superfluous wealth, is levied. For this reason, all the texts dealing with zakat concentrate on these things. They talk of the different kinds of agricultural produce and the details of the zakat due on them with all the variable factors dependent on the type of produce, the quantity, the type of land and whether it is irrigated or not and many other factors. They go into immense detail about livestock and exactly what animals must be taken for zakat given the numbers and ages of the animals in each herd or flock under consideration.

With respect to gold and silver the texts specify the exact weight of each on which zakat is due and make it clear that it is the metal itself which is being taxed since it does not matter whether it takes the form of coins, bullion, nuggets or dust. The only other thing subject to zakat is trade goods under certain circumstances and the zakat on those must also be paid in either gold or silver.
The problem is that most of this has little, if any, relevance to the 20th century urban lives of 90% of the Muslims in the world today. They have no land or animals or gold or silver. That is because the vast majority of the human race no longer have any access to wealth in its natural or real forms. Any wealth we may have is in fact unnatural, or you might say unreal, wealth.

Beginning with the legalisation of usury in Europe in the 16th century and expedited by the growth of banking and the unrestricted use of usurious financial instruments and techniques ever since, the nature of both political power, personal wealth and money itself has undergone a total change in the course of the last three centuries. Real wealth, that is the ownership of the earth’s natural resources, has fallen into fewer and fewer hands, while most people are left with, at best, tokens of wealth in the form of bank balances, share certificates, insurance policies and other financial instruments, with now frequently no more real existence than flickering figures passing electronically from one computer screen to another. At the same time money has turned from being gold and silver coins to being paper representing gold and silver coins to being simply paper tokens whose value is totally dependent on the whims of international speculators.

There is no doubt that usury penetrates every aspect of the financial system which now dominates every part of the globe, which means that all its instruments and institutions – paper money, credit cards, bonds, stock markets, currency exchanges – are in fact also haram. This is not the place to go into this subject in detail but a good deal of work has been done on it and is essential reading for every Muslim.

For some time the Muslims, under the protection of the shari’a, managed to stay free of the tentacles of the usurers but first Egypt, through an unholy alliance between the British and constitutionalist Muslims, and then the heart of the Khalifate in Istanbul fell into the banker’s trap and within a short time sovereignty over the Muslims had passed into the financiers’ hands where it remains to this day.

So there is no doubt that the world financial system has had a devastating effect on the Muslims. It has been the means by which political autonomy has been rested from their hands and it has removed Islam from all the day to day business, trading and shopping transactions which form such a large part of most people’s lives. It is clear that it represents the main bastion of the enemies of Islam and it is where their spurious power resides. It constitutes, therefore, the major battle-ground on which the fight to re-establish Allah’s deen in this time, is going to be fought.
In the case of zakat, however, we can see how it strikes at the very foundations of Islam because it has made it virtually impossible for the vast majority of the Muslims to fulfil one of the primary, foundational obligations of their Deen.

This has been done by changing the nature of monetary wealth, exchanging gold and silver coinage for paper currencies. As we have noted above, the zakat of wealth has to be paid with gold and silver. That it is the metals themselves which are subject to zakat and not their value as money is conclusively shown by the fact that zakat is owed on them no matter what form of wealth they take. It is further substantiated by the traditional way of treating fulus which were coins made of base metal used for lesser transactions when only fractions of gold and silver coins were required.

If someone possessed a large number of fulus coins which together added up to an amount equivalent to the nisab in gold or silver, then according to some ‘ulama zakat would have to be paid on that amount in gold or silver. But even if they had ten times the amount by weight of the same base metal of which the coins were made then no zakat would be due. In this case it would mean that the fulus coin concerned was being considered as a kind of receipt exchangeable for a certain weight of gold or silver. Other ‘ulama held them to be simply numbered symbolic tokens of no intrinsic value whatsoever and maintained that no zakat was due on them whatever quantity they reached.

Paper money should be considered in exactly the same light. One great traditional ‘alim who saw paper money as worthless tokens was the last great Shaykh al-Azhar, Shaykh ‘Illaysh, before the British succeeded in corrupting that great institution of learning in the mid 19th century. He said in a landmark fatwa on the subject:

‘I was asked what is your finding as to the role of the Sultan’s seal (a kind of paper money used in the Osmani khalifate) which circulates as dirhams and dinars? Must Zakat be paid on it, as if it were gold or silver or merchandise, or not?
I replied as follows:
Praise be to Allah and may blessings and peace be upon Our Lord Muhammad, the Messenger of Allah.
No Zakat is paid on it, as Zakat is restricted to cattle, certain types of grain and fruit, gold, silver, the value of turnover stock and the price of stored goods. The items mentioned are not included in any of the above categories. ‘

You will find an explanation for this in the fractionary copper coins minted with the seal of the Sultan which are in circulation, on which no Zakat whatsoever is paid, as they are not included in any of the categories mentioned.

The Mudawwana states that:
“Whoever possesses minor coins amounting to two hundred dirhams during one year, is not obliged to pay any Zakat whatsoever on them, unless they are turnover stock. Then, what he would do is to value it as if it were merchandise”.

In Al-Tiraz, after mentioning that Abu Hanifa and Ash-Shafi’i demanded payment of Zakat on minor coins, as both considered that what is of importance in payment of Zakat is their value, and mentioning that Ash-Shafi’i has two contradictory opinions thereon, he affirms that the posture of the madhhab is that it is not obligatory to pay Zakat on minor coins, as there is no disagreement whatsoever that what is of importance in minor coins is not their weight, or their amount, but their value. If Zakat were obligatory, whatever substance were concerned, the nisab would not be stipulated according to the value thereof, but according to the substance and amount, as in the case of silver, gold, grain, fruit. As its substance lacks relevance as far as Zakat is concerned, it is treated in the same manner as copper, iron and similar substances.
And Allah, to whom praise and worship are due, is most Wise. May Allah bless and grant peace to Our Lord Muhammad and his family. ‘

From this it is clear that in the opinion of Shaykh ‘Illaysh, no zakat whatsoever should be paid on paper money. It must be remembered, however, that at the time this fatwa was pronounced, the shari’a was still in place and gold and silver coinage in plentiful circulation.

The other way of looking at paper money, equivalent to the first view of fulus outlined above, takes it back to its avowed origins as representing gold and silver. It was initially issued as so-called bankers money in the form of a fully redeemable receipt for a certain quantity of gold or silver. In other words any bank note could be taken to the bank which issued it and exchanged for the amount of gold or silver it purported to represent. Some banknotes still retain the echo of this original function, so you find the words “I promise to pay the bearer” or some similar statement printed on them. Seen from this perspective, banknotes are in reality acknowledgements of debt – the bank owes the possessor of the note the stated value printed on it. This constitutes, of course, further evidence of its status being haram. The status of paper money under the shari’a, as debt, is only permitted to be used in very specific and restricted circumstances.

From the viewpoint of Shaykh ‘Illaysh and those like him the only possible way of taking zakat from paper money would be to treat it as merchandise, in other words waste paper. The value you would need to make up the nisab makes it, it is for what it is, where zakat is concerned. If, however, paper money is understood to be a debt, then zakat definitely does come into the frame. In that case any paper money you have in your possession represents gold or silver which you in fact own but which is held for the moment by someone else. The authority which has issued the paper money owes you the amount of gold and silver it represents.

Zakat is owed on debts due to you so if the amount of paper money in your possession reaches the nisab and remains with you for a year or more then you owe zakat on it even though it in fact remains in the form of an unpaid debt. But zakat may only be paid in gold and silver; it is not permitted to pay zakat with a debt. In this situation the only way for people to pay zakat is for them to exchange some of the paper money in their possession for the specific amount of gold or silver needed to cover the zakat owed by them on the unpaid debt owed to them, which is represented by the total amount of paper currency in their possession.

From all of this it is clear that the present world dominating kafir economic system of banking capitalism has destroyed the pillar of zakat. This is partly because it has displaced all economic transactions into the arena of the haram by involving them inextricably in a usurious web which it is at present virtually impossible to escape. But it has done it more directly by redefining the nature of wealth and specifically by changing the nature of money in a way which prevents Muslims from paying their zakat in accordance with the conditions laid down by the shari’a.

A further factor in the subversion of the socially beneficial and politically unifying role played by zakat in the Muslim community has been a particular method of categorising and dealing with different kinds of property developed by the Muslims themselves. In the earliest days no distinction was made between the various kinds of wealth but at a comparatively early stage wealth became divided into two categories: apparent wealth (amwal dhahira) and non-apparent wealth (amwal batina).

Apparent wealth constituted animals and agricultural produce, which were basically in the open and there for all to see, and non-apparent wealth constituted gold, silver and trade goods, which were not open to public inspection in the same way. Non-apparent wealth could become apparent if its possessor took it out of the city on the public highway to sell it or trade with it elsewhere.

At first all categories of wealth were treated in the same way with regard to the collection and distribution of any zakat which was was due on them and it was the duty of the officially appointed zakat collectors to collect all the various types of zakat from all Muslims who owed it. It was their responsibility to make sure that it reached the governmental institution of the bayt al-mal which was the acknowledged official repository into which zakat was collected and from which it was distributed to the eight categories of people entitled to receive it. Where apparent wealth was concerned this continued to be the case by the agreement of all the Muslims until the fall of the Khalifate and the concomitant abandonment of the shari’a at the beginning of this century. But in the case of non-apparent wealth a dispensation was made allowing people, under certain circumstances, to distribute their own zakat on the gold, silver and trade goods they possessed.

This dispensation was certainly not an instruction, and indeed never took the form of anything more than a qualified permission, yet it is now used by many Muslims to justify the present privatisation of zakat which in the present situation is tantamount to abandoning zakat altogether since the other types of zakat are not being officially collected anywhere. Certainly those who take this position have played right into the hands of the secularists who now rule the Muslims in every Muslim land and has made it far easier for them to gain and retain power.

We must first remember that the dispensation was given in an environment where the rule of shari’a was total and the political reality of zakat on all types of wealth was established beyond doubt so that there was no question of the individual distribution of non-apparent wealth endangering the existence of the the whole institution of zakat as is now the case. Although it was accepted as a possibility by some scholars, all allowed, and many preferred, the zakat of non-apparent wealth to be paid to the official collectors.

The great Shafi’i scholar al-Mawardi said that the collector should accept the zakat of non-apparent wealth and assist people in assessing it, and some Shafi’ites say that zakat should be paid to the leader of the Muslims in every case. The Hanafi al-Sarakhsi was of the opinion that no property owner has the authority to invalidate the right of collection which belongs to the leader of the Muslims, having been bestowed on him by the shari’a, and even goes so far as to say that if it is not paid to him then the obligation of zakat has not been settled. Although the people of Imam Malik recognised the distinction between apparent and non-apparent wealth, as far as collection was concerned they considered virtually all wealth to be apparent. In their view all zakat of every type is required to be paid to the leader of the Muslims via the official collectors unless he is known to be unjust in the sense of not distributing it correctly.

Another very unfortunate factor in the corruption of zakat has been the recent part played by Islamic charities and other similar organisations who purport to collect and distribute zakat. It is particularly detrimental because they make other Muslims think that by giving them their money they are discharging their zakat obligation, whereas, as we have seen, they are in reality doing no such thing. In their literature these organisations specifically ask people for their zakat and go as far as telling them how to assess it. This means that they are explicitly appointing themselves as zakat collectors. But it is absolutely clear in the shari’a that zakat collectors may only be appointed by the legitimate political leader of the Muslims; no one may appoint themselves to this duty.

According to most authorities if a person pays zakat to someone who has no right to collect it, they have to pay it again, so not only do charities who pretend to collect people’s zakat not do so, they may even have prevented other Muslims from fulfilling their obligation correctly and by doing that commit a very grave wrong action in the process. Also since they have no right in the shari’a to call themselves zakat collectors, they certainly have no right to any zakat funds on that basis, and any money collected as zakat which they then use for their own expenses has been misappropriated.

Worst of all, however, is the fact that by doing what they do these organisations actively aid the enemies of Islam by preventing the true position of the Muslims from coming to light. By making it appear to the generality of the Muslims that it is correct and even desirable to pay zakat in the way they suggest, they collude with the enemies of Islam, whether consciously or not, by actively confirming that the present political subjugation of the Muslims under non-Muslim rule is an acceptable state of affairs.

The only way that a charity could justify its right to collect zakat would be for it to claim political leadership of the Muslim community which is impossible because to do so would entail immediately forfeiting its charitable status. Therefore Islamic charities should cease forthwith from their false claim to be collectors of zakat.
Anyway what has hopefully be made very clear by all that has preceded is that, notwithstanding the undoubtedly sincere intentions of many millions of Muslims throughout the world, who do their best to put aside an amount of their wealth every year to fulfill their obligation to Allah of paying zakat – and Allah best knows our hearts and is able to do what He wills – the truth is that the obligation of zakat, as it has always been understood by the Muslims, is not being correctly discharged anywhere. This is because the necessary connection between zakat and Muslim governance has been severed and because the zakat of non-apparent wealth, that of money and merchandise, is not being paid in the only acceptable form in which it is permitted to be paid – gold and silver.

Zakat truly is the missing pillar of Islam. 

 

 

 

 

 

 

 

 

 

 

 

 

 
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Posted by on September 21, 2011 in Uncategorized

 

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