Chapter 9: Business Zakat

BPMS1013 THEORY & PRACTICE OF ISLAMIC BUSINESS

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Chapter 9: Zakat

IBS, UUM2013


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• What is Zakat?• Why we do need zakat in Islamic Business?• Which group entitled beneficiaries’ of Zakat?• What percent of zakat will be imposed by

zakat payer?


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CONTENTDEFINITION OF ZAKAHUNDERSTANDING BALANCE STATEMENTTYPES OF BUSINESS ZAKAHTHE PHILOSOPHY OF BUSINESS ZAKAHASNAF ZAKATTHE OBLIGATION CONDITIONS OF ZAKAT IN BUS

INESSWHO IS NOT ELIGIBLE TO RECEIVE ZAKAT?ZAKAH CALCULATIONCONCLUSION


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INTRODUCTION

Zakat is the third pillar of Islam. It has been defined as an act of worship through expenditure of Muslim's property or wealth upon the full possession and above a certain limit.

Zakat also one of the taxation in Islam. Zakat is an obligation for Muslim individual or

organization.

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DEFINITION

• The word of zakat comes from Arabic word.• Literally, zakat means growth, increase,

cleanness. It refers to the purification of a Muslim's wealth and soul

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TYPES OF BUSINESS ZAKAH

• Types of Zakat are; Zakat fitrah (bodies) & Zakat mal (property/wealth)

• Zakat fitrah is a one off payment that is made once in every Muslim Hijrah calendar year at any time between the first day of the month of Ramadhan and the first day of Syawal. All Muslims are obliged to pay this, regardless of their age, status or wealth. The amount of zakat payable is approximately 3kg of staple food in the relevant country or an amount of money that is equivalent to the price of the food.

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TYPES OF BUSINESS ZAKAH

• Zakat mal (property/wealth). It’s means an annual payment based on the amount of wealth owned by a Muslim individual or organization. There are;

Gold, Silver, currency, Commercial commodity, Industrial & Company Animals (camel, cows, sheep Agricultural Savings/Invests Personal Income (salary, wages, etc.) Mineral resource/Rikaz (petroleum, gas, etc.)

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THE PHILOSOPHY OF BUSINESS ZAKAH

• To purify and protect soul from miserliness, selfishness and greed.

• To encourage a Muslim to have gratitude towards God's.

• To clean an assets and wealth from the evil of this world

• To clean poverty in the society

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ASNAF ZAKAH1. Fuqara/fakir/poor/the needy – income is not

enough for daily needs2. Masakin/Miskin – just sufficient to finance

basic needs3. Amil – The one with authority/ responsible to

collect zakat4. Muallaf – Individual who convert to become

Islam

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ASNAF ZAKAH

5. Firriqab – Slave, after release from the owner6. Gharimin – suffered many debt and unable to

settle them7. Fisabilillah – individual involve with activities

to defend and strengthen Islam8. Ibnu Sabil- homeless, refugees, orphanage

muslim

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THE OBLIGATION CONDITIONS OF ZAKAT IN BUSINESS

Islam Absolute ownership

Purpose of business

Nisab Haul

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WHO IS NOT ELIGIBLE TO RECEIVE ZAKAT?

• The rich who have enough to support themselves cannot receive zakat .

• Zakat cannot be paid to: One’s dependents whom he is responsible for supporting. These include the wife, the parents, grandparents (up to the eldest living grand grandparent), children, and grandchildren (down to the last born grand grandchild).

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WHO IS NOT ELIGIBLE TO RECEIVE ZAKAT?

• Zakat cannot be paid to a non-Muslim, unless this person belongs to category No. 4 of those eligible to receive zakat.

• Zakat money shall not be used to construct Mosques, Madrasah, Roads, general Shelter homes etc.

• However, Shelter homes for the poor can be built by zakat money giving full ownership to a poor.

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Zakah calculation

• Zakat is a payment or a fixed proportion collected from the surplus wealth and earnings of a Muslim. It is then distributed to prescribed to 8 beneficiaries. The wealth and earnings has completed the requirement of Nisab (minimum taxable amount) and Haul (one Muslim Hijri calendar year). The payment is 2.5% out of the total wealth deemed for zakah.

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Zakah calculation • This contribution is made payable by a Muslim once in every

year (Hijri/Masihi). • Zakat is paid on the net balance after a Muslim has spent on

basic necessities, family expenses, due credits, donations and taxes.

• Every Muslim male or female who at the end of the Hijri year is in possession of the equivalent of 85 grams of gold or more in cash or articles of trade, must pay his or her zakah at the minimum rate of 2.5%. Zakah has a deep humanitarian and social-political value.

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Zakah calculation

• Zakat is an annual, specified wealth tax to be paid to specific people by all Muslims possessing a minimum net worth above their basic needs.

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Zakah calculation• Example of business zakah• (Current Assets + Investments Liquidity)

x (percent stock of muslim ownership) x (zakat rate 2.5%)

A) Current Assets 400,000B) Investments Liquidity 100,000C) Net Current Assets + Investments 500,000D) Shares Percentage of Muslim (contoh 40%) 40%E) Assets eligible for zakat ( C x D %) 200,000F) Business Zakat ( E x 2.5 % ) 5,000

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Conclusion • The Quran says, "Take alms of their wealth and make them pure

and clean “. The zakat, one of the pillars of Islam, is discussed in both the Qur'an and the hadith literature. Those who give zakat can expect reward from God in the afterlife, neglecting to give zakat can result in damnation. The zakat is considered by Muslims to be an act of piety through which one expresses concern for the well-being of fellow Muslims, as well as preserving social harmony between the wealthy and the poor. Zakat promotes a more equitable redistribution of wealth and fosters a sense of solidarity amongst members of the Ummah. Every Muslim is required to pay Zakat to this organization and conform to the rates and the amount of Nisab decided by the organization.

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Current issue Online payment is one of an approach by electronic payment or better-

known as e-payment. It capable to implement payment process through the network internet with simple way and fast without use the manual process

• These efforts are to make sure each group that qualified to pay zakat not give plenty of reason or to avoid from fulfil the rukun Islam.

• With the momentum spread of information it is expected every state in Malaysia to improve result of zakat from year to year.

• Track the status of current information when users use the central system of zakat. Users can track the status of the information, to eliminate concerns whether the information will be lost or misplaced.

• Manage accounts online charity. Zakat payers may check the payment records of zakat through the accounts that have been addedregistered. Zakat payers also have the ability to update their personal information without the need to counter charity

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Chapter 9: Business Zakat

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Transcript of Chapter 9: Business Zakat