Islam is built upon five pillars: faith, prayer, alms, fasting, and pilgrimage and is therefore considered more than just a spiritual system. Among these pillars zakat is at the third position.
It reveals Islam’s acknowledgement of the existence of poverty in society and therefore highlights an obvious relationship between charity and poverty. This is a dialectic relationship in which charity is seen to lead to the alleviation or eradication of poverty and poverty in turn lead to charity.
Zakat as a means of support and relief for the poor and needy is a divine commandment. It reflects Islam’s strong focus on social and economic justice and serves to provide, through the enforcement of social obligation, fiscal measures, and legal responsibility, a fair and equitable redistribution of wealth.
Its fundamental function as a social justice practice is to, through an equitable growth for all members, alleviate affliction and maintain harmony and stability in society.
Zakat is an annual financial obligation prescribed to all financially capable Muslims and is a basic institution that seeks to fulfill the needs of the poor and needy in the form of an established socio-economic security system.
Of course zakat is not the only institution in Islam for the purpose of alleviating or even eradicating poverty as other institutions such as waqf (religious endowment) and infaq (charity to please God without asking for any favour) also exist.
However, it is worth noting that zakat which is clearly prescribed in the Qur’an and sunnah (tradition of Prophet Muhammad (s)) is the most important and prominent institution of social justice and charity in Islam expressly designed as a tool for addressing poverty and fulfilling the needs of the poor and needy and, therefore, the central focus of this paper.
Zakat is an Arabic term which means “growth”, “increase”, “that which purifies” or “alms”.
One will find that the reference to zakat is made over two dozen times in the Qur’an. At three places in the Qur’an God issues specific command on the payment of zakat whilst twenty-seven times zakat and prayer are mentioned together.
In one place in particular zakat is mentioned with prayers in the same sequence of verses, “those who humble themselves in their prayers” (Qur’an 23: 2) and “who are active indeed in charity” (Qur’an 23: 4).
These two fundamental religious practices are clear indicators of the significance of the vertical relationship between Muslims and God founded on prayer and charity, on the one hand, and the horizontal relationship between Muslims through dispensing part of one’s wealth to another, particularly to one in need, on the other hand.
Paying zakat, therefore, on the part of Muslims is an act of worship and obedience to God. It is for this reason the horizontal relationship is considered by Muslims to be worship, albeit in lower form, because it shows one’s concern for others, both at an individual level as well as at the level of the ummah (community of believers).
Zakat is an obligatory or legal almsgiving and seen by Muslims as part of their service to God. God commands the believers to give charity regularly and freely with a particular emphasis on concern for the poor, the needy, and the wayfarer.
It is clear that zakat is an Islamic welfare and social system and one of the five pillars of Islam under which Islamic social and economic justice practices operate.
Zakat involves giving a fixed portion of one’s wealth to the poor and needy and according to Sunni majority Muslim scholars there are four rates of zakat that depend on the type of assets one possesses.
The most common is a fixed rate of 2.5% on capital income (cash, gold, silver, sellable goods, and receivable debts). On land crops that are produced from rain or spring water or water extracted from the river the rate of 10% zakat applies and the rate depletes to 5% when the crops are produced from animal powered irrigated water.
For resources existing underground, the Hadiths is unclear, but the scholars of Islam consent to 20% zakat on hidden “treasures” and 5% on extracted minerals.
The recipients of zakat are determined by God Himself in the Qur’an. In the Qur’an, God says:
“Sadaqat [here it means zakat] are only for the fuqara (poor), and miskin (the needy), and those employed to collect (the funds), and to attract the hearts of those who have been inclined (towards Islam), and to free the captives, and for those in debt, and for Allah’s cause, and the wayfarer. A duty imposed by Allah: and Allah is All-knower, All-Wise.”(Qur’an 9: 60).
This verse identifies eight categories of heads who qualify to receive zakat funds. These are:
(i) Al-Fuqara (those living in absolute poverty),
(ii) Al-Masakin (those who are unable to meet their basic needs),
(iii) Al-Amilina Alaiha (the collectors and administrators of zakat),
(iv) Al-Muallafatu Qulubuhum (non-Muslims who show attraction or inclination towards Islam),
(v) Fir-Riqab (people attempting to free slaves),
(vi) Al-Gharimin (people consumed by overwhelming debt who need to meet their basic needs),
(vii) Fi Sabilillah (those engaged in the cause of Allah), and
(viii) Ibnus-Sabil (wayfarers).
There are other Qur’anic verses (Qur’an 76: 8; Qur’an 51:19; and Qur’an 70:24-25) and the sunnah of Prophet Muhammad (s) that identifies orphans, destitute, and prisoners of war as people who also qualify to receive zakat.
As a process of wealth redistribution, the collection and redistribution of zakat is a substantial exercise to alleviate poverty.