All posts filed under: Economy

taxation

Taxation in Islam: Wealth Tax

The following article is based on the book Funds in the Khilafah State which is a translation of Al-Amwal fi Dowlat Al-Khilafah by Abdul-Qadeem Zalloom. Allah سبحانه وتعالى has revealed a comprehensive economic system that details all aspects of economic life including government revenues and taxation. In origin, the permanent sources of revenue for the Bait ul-Mal (State Treasury) should be sufficient to cover the obligatory expenditure of the Islamic State. These revenues that Shar’a (Islamic Law) has defined are: Fa’i, Jizya, Kharaj, Ushur, and income from Public properties.

1dinar-coin

Currency of the Caliphate

The Caliphate’s currency is based on the gold and silver standards where the coins and notes in circulation are 100% backed by gold and silver. Islam did not leave any question unanswered, especially questions concerning the complexities of economic life. The Shari’ah has therefore defined the Islamic currency as gold dinars and silver dirhams along with their corresponding weights in gold or silver. The Shari’ah rules related to money such as zakat, blood money (diyah) and hoarding all specify values in gold and silver.[1]