Notes

Zakah (welfare contribution) is the third pillar of Islam. The Arabic word Zakah means to purify or cleanse. Zakah is to be paid once a year on savings at the rate of two and a half percent. This rate applies to cash, bank savings and gold & silver jewellery. The rate for cattle and agricultural produce is different.

Payment of Zakah is a means of keeping our wealth clear of greed and selfishness. It also encourages us to be honest in our earnings and expenditure.

Zakah is a compulsory payment and is neither charity nor a tax. Charity is optional and taxes can be used by the state for any purpose, but Zakah has to be spent under fixed headings like helping the poor, the needy, payment of salaries to its collectors, to free captives and debtors, for travellers in need, to win over hearts and for the cause of Allah (9:60)

Zakah is an act of Ibadah. Ibadah is an Arabic term which means worship and obedience. It includes all activities of life, if we do them to please Allah. We pay Zakah to gain Allah's favour.

Zakah provides us with the opportunity of sharing our excess wealth with those less fortunate than ourselves. In fact we and our wealth belong to Allah. He is the real owner and we are mearly the trustees of His wealth. We do our duty as trustees if we pay Zakah as an obligatory part of Ibadah.

We learned earlier that Islam is a complete code of life which includes among other things, the economic side of life. Islam has its own economic principles. Zakah is one of the basic principles of the Islamic economy, based on social welfare and fair distribution of wealth. In addition to the compulsory payment of Zakah, Muslims are encouraged in the Qur'an to make voluntary contributions to help the poor and needy, and for other social welfare purposes. This voluntary contribution is called Sadaqah (Charity).

Through the payment of Zakah, the rich share their wealth with the poor and thus the process of concentration of wealth is checked and fair distribution ensured.