Islam's Response to Contemporary Issues — Page 175
Economic Peace 175 Zakat Zakat is one of the five pillars of Islam—the others being the affirmation that there is no God but Allah and Muhammad sa is His Messenger; prayers; fasting during the month of Ramadan; and pilgrimage to the House of Allah in Mecca. For instance, the Holy Quran commands: Observe prayer and pay the Zakat and obey the Messenger that you may be shown mercy. 8 The Arabic word Zakat literally means to purify something and in the context of a mandatory levy would mean that the residual wealth after the deduction of Zakat had rendered it pure and lawful for the believers. It is normally levied at 2. 5% on disposable assets above specific thresholds, which have remained in the hands of owners beyond one year. Although much has been said about the rate or percentage of this ‘tax’, we find no reference to any fixed percentage in the Holy Quran. In this respect, I beg to differ with the dogmatic view of medieval scholars. I believe that the question of percentage remains flexible and should be determined according to the state of the economy in a particular country. Zakat being a specific levy imposed upon capital beyond certain thresholds, it can only be utilised for certain categories of expenditure. These have been spelt out in the following verse of the Holy Quran: