Zakat (tax) vs sadaqah (charity)
Most Muslims believe that zakat is only a required payment in the amount of 2.5% on their income primarily for people in need and that it is only required by Muslims. However, the Quran seems to suggest that zakat is more like a government tax required by all members of society, whether Muslim or not, and is not limited to 2.5%.
The word zakat
Zakat is an Arabic word that literally means “that which purifies”. Many Muslims agree that zakat is named as such because Muslims are obligated to pay zakat in order to remain spiritually pure.
Zakat (tax) and salat (prayer)
People familiar with Quranic verses will often note that zakat is almost always mentioned together with salat (prayer). For example, in verse 2:43 we read
|… أَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ …|
|… and establish prayer and give zakat … (2:43 part)|
This verse, and many others, make it clear that zakat is mandatory among Muslims.
Sadaqah and zakat are not the same thing
Even though sadaqah and zakat may have some similarities, verse 58:13 proves that sadaqah and zakat are two different things.
|أَأَشْفَقْتُمْ أَن تُقَدِّمُوا بَيْنَ يَدَيْ نَجْوَاكُمْ صَدَقَاتٍ ۚ فَإِذْ لَمْ تَفْعَلُوا وَتَابَ اللَّهُ عَلَيْكُمْ فَأَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ وَأَطِيعُوا اللَّهَ وَرَسُولَهُ ۚ وَاللَّهُ خَبِيرٌ بِمَا تَعْمَلُونَ|
|Do you fear that you will present charities (sadaqaat) before your consultation? Then when you do not (give charity) and God has forgiven you, then establish prayer and give zakah and obey God and His Messenger. And God is Acquainted with what you do. (58:13)|
Do non-Muslims have to pay zakat?
Non-Muslims also had to pay Zakat
According to verse 41:6-7, disbelievers and polytheists must also pay zakat.
|… وَوَيْلٌ لِّلْمُشْرِكِينَ الَّذِينَ لَا يُؤْتُونَ الزَّكَاةَ وَهُم بِالْآخِرَةِ هُمْ كافِرُونَ|
|“…and woe to the polytheists (41:6) who give not the ‘Zakat’ and in the Hereafter they are disbelievers. (41:7)”|
The verses above make it clear that the obligation to pay zakat was not necessarily a “religious” obligation but rather a societal obligation.
Jews also had to pay Zakat during the time of Prophet Muhammad
According to verses 2:43, the Jews were told to also pay zakat among doing other things. The commandment is mentioned in verse 2:40 which addresses the Children of Israel.
|وَأَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ وَارْكَعُوا مَعَ الرَّاكِعِينَ|
|And establish prayer and give zakah and bow with those who bow [in worship]. (2:43)|
The fact that the Quran requires Jews to also pay zakat further supports the argument that paying zakat was required among everyone and not just Muslims.
People paid zakat long before Prophet Muhammad was even born
Many Muslims assume that the requirement to pay zakat began with Muhammad. However, the Quran proves that the payment of zakat began very long before Muhammad was even born. The following verses indicate who was expected or ordered to pay zakat.
|19:31||Prophet Jesus (Isa)|
|19:55||Prophet Ishmael ordered his people to pay zakat.|
|2:83, 7:156, 5:12||The Children of Israel (Jews)|
|21:73||Prophet’s Abraham, Isaac and Jacob|
|4:162||The Jews (referenced as “hadu” in 4:160)|
|98:5||Zakat was a fundamental aspect of the true religion of God even to people of previous revelations and scriptures from prophets before Muhammad.|
Is zakat based on income or savings?
Some Muslims believe that zakat is based on their savings. However, according to verse 6:141, we see evidence that zakat is based on income and that zakat is due as soon as you get paid. The verse uses the example of a farmer who harvests fruit. When the fruits are ready, they can be harvested. On that day, the farmer must pay his due (zakat) since that is the day the farmer can sell the fruit and get paid.
|And He it is who causes gardens to grow, [both] trellised and untrellised, and palm trees and crops of different [kinds of] food and olives and pomegranates, similar and dissimilar. Eat of [each of] its fruit when it yields and give its due [zakah] on the day of its harvest. And be not excessive. Indeed, He does not like those who commit excess. (6:141)|
Nowadays, most people don’t work as farmers. Nevertheless, the point of the verse above is that one has to pay his dues (zakat) when they receive an income, whether it is every 2 weeks, once a month, or yearly.
Who should manage zakat money?
Many Muslims today pay zakat by giving 2.5% of their income to a mosque for distribution or they manually distribute it themselves to whoever they think deserve it. However, according to verse 22:41, it seems to suggest that governments should establish a system of zakat.
|الَّذِينَ إِن مَّكَّنَّاهُمْ فِي الْأَرْضِ أَقَامُوا الصَّلَاةَ وَآتَوُا الزَّكَاةَ وَأَمَرُوا بِالْمَعْرُوفِ وَنَهَوْا عَنِ الْمُنكَرِ ۗ وَلِلَّهِ عَاقِبَةُ الْأُمُورِ|
|[And they are] those who, if We establish them in the land, establish prayer and give zakah and enjoin what is right and forbid what is wrong. And to God belongs the outcome of [all] matters. (22:41)|
Notice how verse 22:41 mentions “if We (God) establish them (people) in the land”. Obviously, people who are established in a land are people who live in an organized society with a system managed by a government.
Pay zakat to people individually or to a central authority for distribution
Aside from the amount of zakat or tax distributed to those in need, it should be obvious that having a centralized system for collecting, spending and distributing this money would be far better than if people individually decided who to give some of their money to.
If people individually give zakat money to the needy, then
- only certain individuals would receive zakat money and possibly, only Muslims
- many people who qualify for zakat money may not receive any at all
- benefits received by recipients would strictly be limited to money and no other form of help
- zakat recipients would only receive cash which could be misused, e.g. for drugs and alcohol
- the overall welfare of everyone would be severely limited as zakat money would strictly be used for distributing money to the poor and needy
If people give zakat money (or tax) to a central government, then
- some of the money can be distributed to all needy people, not just some people
- everyone, both Muslims and non-Muslims, can receive financial help fairly and equally
- some of the money can be used for social programs as well as public services such as free or subsidized transportation, healthcare, education, and so on
- recipients can’t abuse tax / zakat benefits because governments can issue food stamps, for example, which can’t be used for drugs and alcohol
- the overall welfare of everyone would improve
Who can receive zakat money?
Most Muslims believe that zakat money is strictly for people who are poor or in need. Many Muslims also believe that zakat money is only for Muslim recipients. Many Muslim scholars quote verse 9:60 to determine 8 categories of people who can receive zakat money. Below is the correct English translation of verse 9:60
|“Charities (Arabic: Sadaqaatu) are only for the poor (Arabic: Fuqara) and the needy (Arabic: Masakin), and those who collect them (Amalina Alayha), and those whose hearts are to be reconciled (Mu-alafati qulubuhum) and to free the captives (Arabic: Fil-riqabi) and the debtors (Arabic: Gharimina), and for the cause of God (Arabic: Fi-Sabili-llahi) and (for) the wayfarer (Arabic: Sabili);- a duty imposed by God. God is Knower, Wise” (9:60)|
It is very clear from verse 9:60 above that it addresses charities (sadaqaat) and not zakat. And, as we have proven above in verse 58:13, and as most Muslims would agree, charity and zakat are two different things. While the Quran is absolutely clear as to who can receive charity (sadaqah) money, the Quran does not state who can receive zakat money. Therefore, it is incorrect to say that zakat money is strictly limited to the poor and the needy or just Muslim people.
As suggested by verse 22:41, if a government is to manage zakat money, then it would make sense that the Quran would not specifically state how zakat money should be used since different countries have different needs. For example, in the United States, according to Office of Management and Budget (OMB), the 2015 federal spending by category was
|33.26%||Social Security, Unemployment and Labor|
|27.42%||Medicare and Health|
|5.97%||Interest on Debt|
|3.54%||Food and Agriculture|
|1.6%||Housing and Community|
All of the categories above, except for “Military”, “Interest on Debt” and “Veteran’s Benefits”, support the poor and people in need by providing financial support for the elderly (social security) and the unemployed, providing medical assistance to the poor and people in need (Medicare and health), providing food for the poor and the needy, providing education to low-income students, providing subsidized or free public transportation for the poor and the needy, and providing housing assistance for the poor and the needy.
As you can see, even a non-Islamic government such as the government of the United States ends up spending much of its money on social programs that benefit the poor and the needy because it makes sense to do so.
Why should non-Muslims receive zakat money?
Some, if not many, Muslims believe that only Muslims are entitled to receive zakat money. There is no such restriction in the Quran. As a matter of fact, the Quran makes it clear that polytheists (41:6-7) and Jews (2:43) had to pay zakat during the time of Prophet Muhammad. Therefore, if those non-Muslims had to pay zakat, it would only be fair if the poor and needy among them could also receive zakat money. Unfortunately, many Muslims are quick to judge non-Muslims as predestined people who will surely go to Hell. However, it is not unreasonable for a non-Muslim to eventually convert to Islam. Obviously, not everyone is born into a Muslim family and not everyone has the same circumstances in life.
How much should zakat be?
Most Muslims believe that zakat is 2.5% on savings or income to be paid once a year. Muslims scholars have decided that the 2.5% comes from some relatively vague hadeeth. However, there is no mention of zakat being strictly limited to 2.5% in the Quran. As suggested by verse 22:41, if a government is to manage zakat money, then it should be a percentage that is necessary for the government to do its job and support the people. Obviously, every country has different circumstances and needs. Oil-rich Gulf countries with small populations such as the UAE and Saudi Arabia have plenty of valuable natural resources that they don’t need money from their residents in order to run the country and provide for the poor and the needy. Consequently, both the UAE and Saudi Arabia have a 0% tax on their people. On the other hand, the United States needs to charge an average 25-30% tax on its residents, with an exemption for low-income people, of course. Considering the different circumstances of different countries, it would make sense, then, that the Quran would not limit how much each country must charge for zakat (tax) so that each government can decide how much it needs to best help its people.
2.5% zakat versus government tax
It should be obvious that most governments use a portion of their tax revenue to support the poor and needy. As mentioned above, the United States government spent more than 50% of its 2015 tax revenues on social programs. Assuming a US taxpayer had an effective tax rate of 30%, then at least 15% of that taxpayer’s tax money would go towards the poor and needy in one way or another. That is already 6 times the 2.5% zakat that most Muslims pay for the same cause, and that’s only for federal tax – it doesn’t include state tax. Since most governments charge much more than 2.5% for income tax, then by paying your income tax to the government, you are already paying much more from your income for the same purpose as the 2.5% zakat most Muslims pay. Since most of a government’s tax revenues support the poor and needy, then it should be easy to see how your government income tax is really no different than zakat – it’s just not called “zakat” because “zakat” literally means “that which purifies” whereas the Arabic word for “tax” is “dareeba”.
Zakat and taxes in Muslim countries
Many Muslims living in Muslim countries complain about poverty, lack of government support, expensive healthcare, and low quality of life. These same people admire non-Islamic countries such as the United States, Australia, and Western European countries for offering much support to their citizens such as free healthcare, education, and financial support for the poor and needy. If we compare these two groups of countries, we quickly realize that a large percentage of the population in non-Islamic countries pay taxes whereas in Islamic countries, an extremely small percentage of the population pays taxes, even though many of them still hand out 2.5% of their income to the poor and needy. In the Islamic Republic of Pakistan, the government tax rate is between 7.5% and 35% however, only 0.57% of the population pays taxes. Assuming everyone paid 2.5% of their income for zakat, it’s clear that, considering the quality of life in Pakistan, their 2.5% zakat money doesn’t appear to make much of a difference in the general welfare of the people.
Some Muslims, whether living in a Muslim country or not, are extremely disciplined when it comes to paying 2.5% of their income for what they call “zakat”. These same people receive support from their government which obviously comes from taxpayer money. Ironically, however, when it comes time to pay their income tax to their government, they either complain or, worse yet, avoid paying it as much as possible. Furthermore, there are some Muslims who withdraw state benefits when they are clearly not eligible for them. While it may not seem like stealing, what these Muslims are doing is, in effect, stealing taxpayer money, regardless of how little, that could be meant to support people who are actually poor or in need.
How much is enough zakat (government tax)?
Low tax revenues means that a government can only fund basic services such as policing, the courts and the armed forces. In order to provide universal healthcare, education, and a social safety net for all of a country’s residents, higher tax revenues are required. According to the UN, this can be achieved if a country’s tax revenues are at least 20% of its GDP . If achieved, this would result in an increase in a society’s quality of life. The Human Development Index (HDI)  is a ranking of a society’s quality of life by country. The index groups countries into 4 categories. Following is a 2016 listing of those categories with a sampling of countries. The listing also shows each country’s 2015 tax revenue-to-GDP ratio . Each country’s estimated 2017 GDP per capita per the International Monetary Fund (IMF) is also listed to give an idea of the average individual’s annual income for that country . In addition, I note whether a country is an Islamic country.
Very High human development
|Rank||Country||Islamic?||HDI||Tax Revenue-to-GDP Ratio||GDP per capita|
High human development
|Rank||Country||Islamic?||HDI||Tax Revenue-to-GDP Ratio||GDP per capita|
Medium human development
|Rank||Country||Islamic?||HDI||Tax Revenue-to-GDP Ratio||GDP per capita|
Low human development
|Rank||Country||Islamic?||HDI||Tax Revenue-to-GDP Ratio||GDP per capita|
One thing of note is that all Islamic countries in the “Very high human development” category are oil or natural gas-producing countries. These countries do not collect much, if any, tax from their residents because they don’t need to as they’ve been lucky enough to have a very valuable natural resource. These are mostly small countries with small populations and lots of oil and gas.
Based on the table above, most Islamic countries have a tax revenue as % of GDP value of less than 20%. And as you can see, the top 10 countries with the highest quality of life are the countries that collect the most tax from their residents. Not a single one of these top 10 countries is an Islamic country.
If we take the average tax revenue as a % of GDP for all countries in each category, we get the following table.
|Country Group||Average Tax Revenue as % of GDP|
|Top 10 Very High Human Development||36.75|
|Very High Human Development||31.92|
|High Human Development||22.08|
|Medium Human Development||17.09|
|Low Human Development||15.08|
Based on the two tables above, it appears that, in general, the more taxes a country collects (higher tax revenue as % of GDP), the higher the quality of life of its residents.
Quite ironically, the requirements of a society based on an inclusive tax system seem to be better understood in non-Islamic countries than in many Muslim countries that cannot often fulfill the basic demands and needs of their citizens.
It should be clear now that Islamic zakat is actually government taxation which is mandatory for everyone, not just Muslims, and for the benefit of everyone, not just Muslims. In Islamic countries, since many Muslims think that zakat is not government taxation, it may be helpful to change the term “income tax” to “zakat” since, as I have explained above, the two terms are synonymous.
Is charity or zakah only for Muslims?
Some Muslims refuse to give charity to non-Muslims as they consider all non-Muslims as infidels (kafir). First of all, the Quran never says you may only give charity to Muslims. Secondly, not all non-Muslims are kafir because to be a kafir, you have to intentionally reject God. If you were raised in a Hindu family and you worship statues, then you are an idolater (mushrik), but not necessarily an infidel (kafir). You are, however, wrong in thinking that a statue is God and, unless you use your brain to think about that to discover the truth, as required of you in verse 8:22, you may very well end up in Hell.
|إِنَّ شَرَّ الدَّوَابِّ عِندَ اللَّهِ الصُّمُّ الْبُكْمُ الَّذِينَ لَا يَعْقِلُونَ|
|Indeed, the worst of living creatures in the sight of Allah are the deaf and dumb who do not use reason. (8:22)|
As stated in verse 9:6, idolaters are people who simply don’t know that the statues they worship are not god(s).
|وَإِنْ أَحَدٌ مِّنَ الْمُشْرِكِينَ اسْتَجَارَكَ فَأَجِرْهُ حَتَّىٰ يَسْمَعَ كَلَامَ اللَّهِ ثُمَّ أَبْلِغْهُ مَأْمَنَهُ ۚ ذَٰلِكَ بِأَنَّهُمْ قَوْمٌ لَّا يَعْلَمُونَ|
|And if any one of the polytheists seeks your protection, then grant him protection so that he may hear the words of Allah. Then deliver him to his place of safety. That is because they are a people who do not know. (9:6)|
If they do not reject God, then they can get guidance so as to see their mistakes and discover the real God. In the meantime, they deserve financial help just like anyone else. Not everyone is born into a Muslim family but everyone can convert to Islam at any time in their lives. To refuse to help someone based on their current belief is not only inhumane but counter to the spirit of Islam. Who knows? The person you refuse to give charity to based on their current belief may end up converting and becoming a more righteous Muslim than you.
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