Authors
1
Faculty of Economics, Kharazmi University, Tehran, Iran.
2
PhD in Economics, Imam Khomeini Educational and Research Institute, Qom, Iran
Abstract
Introduction and Objectives: The compulsory payment system of early Islam consisted of various types of payments, each of which had its own specific characteristics. Among them, Zakat and Khums were two important bases for financing expenses in early Islam, which were within the framework of specific rates and exemptions. The early Islamic period refers to the period from the time of the Prophethood to the era of the tābiʿūn, i.e. the era of the Prophet (peace and blessings of Allaah be upon him) to the Umayyad era, or more broadly to the period of the tābiʿūn followers, i.e. the first era of the Abbasid Caliphate (Azizi, 2019). Governments in that era also forced people to pay funds to manage their expenses so that they could handle the affairs of the country and, in other words, govern the country; something that the lawgiver also paid attention to and made zakat on bodies, zakat on property, and khums obligatory based on it, so that part of it would be allocated to the Islamic state and part would be directly allocated to achieving the goals of the state.
Based on the definition of a tax as a compulsory payment imposed by the government on individuals or institutions (Cox et al., 2024), we consider zakat and khums as two obligatory payments imposed by the lawgiver in early Islam. Tax brackets in the Islamic compulsory payment system are determined by the Nisab (which is the minimum amount that a Muslim must have before being obliged to zakat) criterion. The Nisab expresses the amount of zakat that must be paid for each item of zakat. An analysis of these amounts, by discovering the intentions of the Sharia in the taxation system of the Prophetic era, will inspire approaches to the tax system of Islamic society, which forms the purpose of this article.
Method: This research uses a qualitative and quantitative research method is of an applied nature, and has collected information from books and articles through library studies and scientific systems with a descriptive-analytical method.
To achieve the aim of the article, the mandatory payments of Zakat and Khums, their explanations, and nisabs have been examined. In examining the nisabs of Zakat and Khums, comparisons and assimilations have been made to obtain equivalent values and to discover and extract the patterns of the nisabs.
Part of this work was done with the help of mathematical relations and the use of a proportionality table, and in this regard, some ratios were quoted by referring to the virtual market. Finally, the results were transferred to graphs so that their inference and use could be made easier and more reliable.
A final point in the research method is that in the part of the article that is based on the jurisprudential opinions of jurists, famous sayings have been limited, and entry into jurisprudential disputes has been avoided; Also, Sunni jurisprudential views have not been taken into consideration due to differences in fundamentals, although studies show confirmation of research findings in Sunni jurisprudence, which is used in most Islamic countries.
Results: The analysis of the zakat and khums thresholds has yielded approaches, some of which are as follows:
The narrations on zakat (for example, see: Kulayni (Sheikh), 1387, Vol. 7, Kitab al-Zakat) and the amounts of zakat show that the legislator did not pay attention to rational accuracy in determining the amount of zakat and its zakat, and gave more importance to the ease of paying zakat by taxpayers.
In the Islamic system, low rates should be imposed on the production sector, including the production of goods or basic products of society, and high rates should be imposed on the service and commercial sectors. Also, with another approach, it can be said that low rates are recommended in the production sector and high tax rates are recommended in the income sector of individuals and households. In addition, higher rates are recommended in the agricultural sector than in livestock farming, and light livestock have lower rates than heavy livestock.
The method of receiving and paying Zakat and Khums funds was carried out both with and without the intervention of the government, and the lawgiver did not place special emphasis on either of these two.
Financial assets were also considered by the lawgiver, and only non-financial assets were not taxed.
The monetary and quantitative nature of Zakat and Khums payments is acceptable and has no preference over each other.
In the Islamic tax system, by determining specific brackets in separate tax bases, the tool of regressive tax rates was used to encourage the producer to be subject to a lower tax rate by producing more or earning more income, and thus earning more profit. - Given the nature and type of tax base, fixed and regressive tax rates are justifiable.
Discussion and Conclusions: In Islam, to create balance and avoid the circulation of property in the hands of capitalists, several obligatory and recommended payments have been determined so that both the poor and the deprived can share in the wealth of the rich and the financial needs of the Islamic government are met. Among the obligatory payments, some of them, such as zakat and khums, are considered taxes in the present era because they are mandatory by the law, just as taxes are mandatory by the government.
The findings of the early Islamic tax system show that the Islamic government can both take charge of the collection and distribution of income from obligatory payments and, at least in some cases, only take on the role of guidance, policy-making, and supervision. Zakat resources can be mobilized and allocated through the voluntary activities of individuals in individual forms or groups, and government expenses are reduced accordingly.
In the Islamic tax system, financial assets such as dirhams and dinars, as well as non-financial assets such as livestock and grains, are subject to taxation, and taxation is not limited to a specific type of them. Also, the payment of each item to which Zakat or Khums is due is not necessarily limited to a specific type of goods or property. Therefore, from the perspective of the Shariah, the amount or monetary nature of a tax payment is not relevant, but rather serves as facilitation for the taxpayer.
This situation shows that the tax system has a kind of flexibility in tax payment, the result of which will be the convenience and comfort of the taxpayer, because he will pay from the property at his disposal and he will not have to worry about converting it. The result of such a policy will be an increase in taxpayers and, as a result, an increase in government revenue and prosperity.
Acknowledgement: The authors thank the anonymous reviewers whose helpful comments improved the article.
Conflict of Interests: The authors have no conflicts of interest to declare related to the content of this article.
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