Zakat: The measure of Social Welfare
Sunday, June 14, 2015
As Holy month of Ramadan begins, most of the Muslims are busy with complying one of the most important tenets of Islam for social responsibility called “Zakat.” As Ramadan is holy month, any good deed is more rewarding hence Muslims take this opportunity to calculate & pay Zakat during the Ramadan.
What is Zakat?: Zakat is compulsory charity by Muslim on his wealth on set proportion. It’s purification of his wealth from sins. It’s calculated @2.5% on Zakatable wealth after certain threshold (Nisab) amount. Usually it is calculated on annually based on lunar calendar.
Social Welfare: Social justice & welfare are most sought human values in modern world. It’s virtue of modern nations. Historically, all civil movements were mobilized for those two principles. Developed & undeveloped countries are finding out the ways to bring social justice through social welfare.
The world is progressing with limitless horizons but it’s very painful to see extreme inequality of income & resources among the individuals & nations. The gap between the rich & poorer is widening. This is leading towards widespread poverty, deprivation of human life & right to live with dignity. Modern Governments are trying to address these problems through social welfare measure based on taxation system whereby they can take from rich & will distribute among the needy by various schemes. (MNREGA is a classical example in Indian context.)
Zakat is powerful measure of social welfare introduced by Islam before 1400 years. In fact, more than a religious obligation, Zakat plays important role against concentration of wealth with minority creamy segment of society with spiritual dimension of purification of soul, avoidance of greed & avarice. It’s of paramount importance in helping poor & needy in their financial difficulties.
The wider scope for determining the zakatable wealth is bringing more Muslims in ambit of Zakat which is reducing hoarding in non productive assets & it’s hard to escape from eligibility.
Following are major Zakatable class of assets:
-The gold and silver, precious stones & metal or ornaments made of such things
- The money kept at home or in bank accounts;
- Equities and units acquired directly or through investment funds;
- Movements in market values and exchange;
- Agricultural products;
- Herds of animals like cows, oxen, goats, sheep and camels;
- Mining products;
- Pensions;
- Property acquired for investment.
Beneficiaries of Zakat: The wider scope of beneficiaries covers objectives of modern social welfare measures, which are as follows:
-The Poor – who don’t have sufficient means to survive.
- The needy people: who have short of income to meet needs
- Administrators & collectors
-Sympathizers & well wishers of Islam
- Release of captives
- Charities in the name of God for deprived; mostly for medical & educational purpose
-Relieve the debt ridden
-Distressed travelers
WHEREAS IT MUST BE NOTED THAT ZAKAT IS NOT ACCEPTABLE FOR THE DEPENDENTS LIKE PARENTS, GRNAD PARENTS, WIFE, CHILDREN & GRAND CHILDREN BECAUSE THEY ARE MUSLIM’S PRIME RESPONSIBILTY. So this ensures family bonding & commitment.
ALSO ZAKAT IS NOT PERMISSSABLE FOR CONSTRUCTION OF MOSQUES SO THAT MONEY WILL COME INTO THE REAL CHARITABLE PURPOSE.
So from above scope, beneficiaries & non allowances it’s very obvious that it’s Social Welfare measure with spiritual dimension.
If Zakat is properly collected & distributed among the rightful beneficiaries, it will reduce the inequality in society considerably.
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Salim Desai is Chief Financial Officer (CFO) with Al Razzi Holding Co KSC. He holds MBA, CMA, CIPA and also passed CPA. He is an expertise in Finance analysis and Investments and passionate educationist.
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