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Islamic taxation 4.

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Islamic taxation 4.

2021. március 26. - 18:38

The different types of public property revenues

Islam funds the basic needs of its entire population by designating any utility regarded as indispensable for the community. These are public assets that are difficult to find, hardly possible to access and use on an individual level, or their maintenance and exploitation would thus not be possible. This means the utilities would be publicly owned and the revenue generated would be administered for the benefit of all citizens. This is derived from the hadith of the Prophet (peace be upon him):

“Muslims are partners in three things: in water, pastures and fire" (Hadith 26. Ahmad, ibn Maja)

Although the hadith mentioned just three things, we can utilize qiyas (analogy) and extend the evidence to cover all instances of indispensable community utilities. Thus, water sources, forests of firewood, pastures for livestock and the like are all public utilities as well as oil fields, electricity plants, seas, lakes, public canals, gulfs, straits, dams etc. The State will impose an admin charge on the people which will be revenue for the State. It will also export oil to nations abroad which will bring in huge amounts of wealth to the state’s treasury. At the same time, the state also uses the revenues from public utilities for the welfare of its citizens.

The properties of Zakat

Zakat, the alms is a wealth tax liable on 2.5% of people wealth held for a year. The Zakat properties are kept in a special place in the Bait ul-Mal (state Treasury) and they are not spent except for the eight categories mentioned in the Quran 9:60.

Booties (Fai')

This is the wealth that comes under the jurisdiction of the State via the integration of non-Muslim areas. It is a historical category. Muslim leaders obliged Muslims to live in the political, legal, economic, and religious system of Islam, i.e., the Caliphate. The net result of that was that the Caliphate’s economy was continually integrated other economies as they come under its jurisdiction.

Land Tax (Kharaj)

The Kharaj is a levy imposed on land; it's a type of land tax. The tax is based on the quality of the land, respectively, calculated on the basis of the value of the yield that can be produced. A balance needs to be maintained as excessive taxation changes the potential of agricultural land. Irresponsible taxation can result the productive land can remain unused. Therefore, this tax is to be coupled with a number of other policies; the State can initiate agricultural reform, provide subsidies, cheap land rent to citizens in order to meet the objectives of agricultural policy.

Head Tax (Jizya)

Jizya is a per capita yearly taxation historically levied in the form of financial charge on permanent non-Muslim subjects (dhimmi) of a state governed by Islamic law. Muslim jurists required adult, free, sane males among the dhimmi community to pay the jizya, while exempting women, children, elders, handicapped, the ill, the insane, monks, hermit, slaves and musta’mins (non-Muslim foreigners who only temporarily reside in Muslim lands). Dhimmis who chose to join military service were also exempted from payment, as were those who could not afford to pay. According to Islamic law, elders, handicapped etc. must be given pensions, and they must not go into begging.

The application of jizya varied in the course of Islamic history. Together with Kharaj, a term that was sometimes used interchangeably with jizya, taxes levied on non-Muslim subjects were among the main sources of revenues collected by some Islamic polities.

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