«International Conference of Global Islamic Studies 2014 Zakat on Salary and Wages: The Unsettled Juristic Issues Luqman Haji Abdullah Senior ...»
International Conference of Global Islamic Studies 2014
Zakat on Salary and Wages: The Unsettled Juristic Issues
Luqman Haji Abdullah
Senior Lecturer, Department of Fiqh and Usul, Academy of Islamic Studies,
University of Malaya, 50603 Kuala Lumpur
Wan Marhaini Wan Ahmad
Senior Lecturer, Department of Finance and Banking, Faculty of Business and
Accountancy, University of Malaya, 50603 Kuala Lumpur
Wan Zulkifli Wan Hasan
Senior Lecturer, Centre for General Studies, National University of Malaysia,43600 Bangi, Selangor Email: firstname.lastname@example.org Abstract Among contemporary issues in the field of zakat is the issue of zakat on salary and wages. It first started when al-Qaradawi stressed in his 2 volumes book titled Fiqh alZakat that the zakat on salary and wages is due on the day of receiving it, that is, to ignore the condition of hawl. It is a matter of an agreement among the four schools of law and has been in practice for centuries that incomes in the form of cash must observe the condition of hawl to make it liable for zakat. In Malaysia, various fatwas on zakat on salary and wages has been issued in many states adopting the view of alQaradawi in this issue. The related departments under the Majlis Agama have been working hard to convince people that they have to pay zakat for their salary and wages resulting in a substantial annual increase for the zakat revenue received by the Majlis. Despite this there are still unsettled issues that worth revisiting in regard to the zakat on salary, both juristically and operationally. The key issue centered upon the justifications of ignoring the condition of hawl in the acquired cash assets.
Keywords: zakat, salary, hawl, Majlis, school of law.
International Conference of Global Islamic Studies 2014 Introduction Zakat is one of the pillars of Islam and it is an important institution in Muslims society due its combining nature of both ibadah and maliyyah. There are specific types of property and assets that have been listed down in the Quran and Hadith which are subjected to zakat, namely, livestocks, agricultural products, gold and silver, trade goods, buried treasures (rikaz) and minerals. The jurists have, however, expanded the list to some other assets by using an analogy to that mentioned in the Quran and Hadith. These are including salary and wages which are now days in the form of paper money. Among the condition of liability of zakat on paper money is to complete a lunar year or hawl as applied to gold and silver. This has been established in the four schools of law and also among the majority of the other jurists. This established rule is however has been challenged by some modern jurists. Among them is al-Qaradawi who takes lead in this and stressed that the requirement of hawl has no basis for wealth like salary and wages. To facilitate further discussion about this, we first examine the discussion of the jurists on the requirement of hawl in zakat.
The Established Rulings on The Requirement of Hawl in Zakat
The established ruling is that hawl is a requirement in zakat. This is based on the hadith “No zakat is to be imposed on wealth until the hawl has passed”, the concensus of those who came after the companions (tabi’in) and the jurists. According to the Hanafi school of law it is a requirement that at least the nisab has been reached at the beginning and at the end of the hawl to make a wealth liable for zakat. Any income acquired in the middle of hawl like that acquired through hibah (gift) or inheritance is accumulated together with the existing wealth and form a set of wealth which subjected to zakat after passing the hawl. In Maliki, Shafi’i an Hanbali school it is a requirement that the wealth is maintained above the nisab from the beginning to the end of the hawl to make it liable for zakat. Any wealth acquired in the middle of the hawl is not accumulated together with the existing wealth, thus it forms a new accumulation itself. This is applied to gold and silver and to the cash money. For the trade the hawl is started from the beginning of the business and zakat is calculated after a lunar year has passed. It is calculated on accumulation basis, and after a year, if the wealth reaches the nisab zakat is liable on it. For the agricultural there is no hawl is calculated rather it is subjected to zakat on the day it is harvested (Wahbah al Zuhaili, 2011). This is the established and accepted position of the requirement of hawl in zakat especially for cash money and it forms the view of all four schools of law and including the view of Ibn Hazm.
The requirement of hawl, however, is waived by some jurists in an advance payment of zakat. An advance payment of zakat refers to a payment of zakat before the completeness of a hawl. It may take place before or after the completion of nisab. The majority of jurists from the Hanafis, Malikis, Shafi’is and Hanbalis maintain that an advance payment of zakat is not possible before the completeness of nisab because it is considered as performing an observation prior to the reason of its obligation (alNawawi, 1977; al-Maqdisi, 1972). Thus, according to al-Sarakhsi (1978), al-Mardawi (1998), al-Nawawi (n.d.) and al-Maqdisi (1972), an advance payment of zakat is allowed only once the nisab of the zakatable wealth is achieved. The rationale of the view has been aptly summed up by an Islamic legal maxim which states that,
International Conference of Global Islamic Studies 2014
“Preceding a law before its requirement when its reason precedes, is permissible ( ان .)تقدمي احلمك عىل رشطه اذا تقدم سببه جــائزTherefore, when the reason of obligation that is nisab exists, the non-conclusion of the hawl will not affect the performance of zakat.
Furthermore, when the owner of zakatable wealth is willing to forgo his right to the conclusion of the hawl, it no longer becomes a requirement in the payment of zakat.
This is for al-Qarafi (1994) similar to the case of debt which is paid earlier than the originally promised settlement date.
The advance payment of zakat is approved based on hadiths such as the one narrated by ‘Ali where ‘Abbas has asked the Prophet p.b.u.h. regarding advancing his zakat before the completion of the hawl, and the Prophet has allowed him to perform it (alBahuti, 1982; al-Qarafi, 1994) The Malikis, however, add further restriction whereby an advance payment is only allowable if executed just before the conclusion of the hawl (Sahnun, 1994; al-Azhari, 1970; al-Qarafi, 1994). They base their view on a hadith which states that zakat on wealth becomes an obligation only when it reaches its hawl. Zakat for them is considered to be an ‘ibadah that requires intention. For an intention to exist, it requires specific quantity (qadr) and time (waqt) which in the case of zakat is nisab and hawl respectively. Without either one of these requirements, the owner of the zakatable wealth is not obliged to pay zakat yet (al-Mardawi, 1998; al-Qarafi, 1994;
The Juristic Basis of Zakat on Salary and Wages
Al-Qaradawi in his book Fiqh al-Zakat has highlighted the need to pay zakat for the salary and wages without fulfilling the requirement of hawl. He established his view on the ruling of al-mal al-mustafad (earned income) in which he claimed that there were some companions and those who came after them who opined that this kind of income is subject to zakat without the requirement of hawl. They were Ibn ‘Abbas, Ibn Mas’ud, Mu’awiyah, al-Sadiq, al Baqir, al-Nasir, Dawood and also reports from Umar bin Abd al-Aziz, al Hasan, al- Zuhri and al-Auza’i. He has categorized al-mal al-mustafad into three, namely; the new income that is accumulated from the business activities and the new accumulated produce of livestocks. This new income is combined together with the original assets and forms a nisab and the hawl is calculated from the original asset first started. Secondly, the income that is acquired by selling the asset that the zakat has been paid on. This is like the person who sells his livestock after paying zakat of that livestock. This acquired income is not subjected to zakat until the hawl passes because Islamic law does not impose double zakat on one particular asset. The third one, the income that is acquired independently, i.e, not the proceeds of an existing asset, such as wages for a work done, a gift, a profit from a capital, etc. For this last, al Qaradawi says that the zakat does not have to fulfill the condition of hawl, rather it is due on the day of receiving it (al-Qaradawi, 2000).
In establishing this view al-Qaradawi has stressed that there is no single authentic hadith that the ruling on the requirement of hawl for the third category of al mal mustafad as mentioned above can be derived. For example the famous hadith reported from Ibn Umar who said that: “Anyone who acquires an income, there is no zakat impose on it until the hawl has passesed” (al Tirmizi). According to him this
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hadith is not at the level of marfu’ and therefore not considered as a valid argument.
He strengthens his argument by bringing the fact that this matter has been subject of disagreement among the companions themselves and those who came after them (tabi’in). It is reported that Abu Bakr did not collect zakat until the hawl had passed.
There is also report that ‘Aisyah said that: “No zakat is imposed until the hawl had passed”. There are also reports from Ali bin Abi Talib and Ibn ‘Umar to the same effect. Whereas reports to the opposite effect are from Ibn ‘Abbas, Ibn Mas’ud, Mu’awiyah and ‘Umar bin Abd al-‘Aziz which show that these companions and tabi’in collected zakat on the day it was acquired without waiting the passing of hawl.
Mu’awiyah for example collected zakat from the gifts on the day he received them.
Abu ‘Ubayd reported that Ibn Mas’ud made gifts to companions in small bags and immediately collected zakat from them (al-Qaradawi, 2000).
He further maintains that to pay zakat immediately and not to wait for hawl is more beneficial to recipients and easier in term of administration on the part of government.
This method of paying zakat is also in line with the religion of Islam which exhort Muslims to involve in charity deeds, helping each other, taking care of the society and sharing their pain. Waiting passing of hawl is only to make people keep spending and enjoying their income and to ignore their duty of spending in the way of God and helping those who are in need. He argues that if the farmers are to pay zakat 5% or 10% of the produce immediately after harvest, it is not right that we let those like engineers, lawyers, doctors with a big income to wait for a year before paying their zakat (al-Qaradawi, 2000). Mahmood Zuhdi (1993) sees that though the argument of al-Qaradawi at first stressed on hadith but he finally resort to maslahah to support his argument. He admittedly agrees with al-Qaradawi in this method of using maslahah in justifying the zakat imposed on salary and wages. He says that this does not go against the methods of establishing rulings in Islamic law. This is according to him as a contemporary fatwa that does not in any way weaken the classical fatwa.
Unsettled Juristic Issues
The basis and arguments as discussed above face rejections from many scholars and authorities. The rejection can be said as valid given that the authority of the hadith of Ibn Umar who report that “No zakat is to be imposed on wealth until the hawl has passed” is a hadith of marfu’. Ibn Rushd held this position and said that this was an ijma’ among the jurists and there is disagreement except reports from Ibn Abbas and Muawiya. (Ibn Rushd, 1993). According to Rafiq al-Misr (2000) all the hadith of hawl are maintained as strong and not as claimed by al Qaradawi when he weakens the hadith of hawl.
In Malaysia although in almost all of the states is in favour of zakat on salary and wages without waiting the passing of hawl, the objections are still felt among the scholars. Ali Jad al Haq in replying to the letter from the religious authority of Malaysia which asking him regarding the zakat on salary and wages said that “ The income that is acquired from work like wages and salary is not liable for zakat on the day of acquiring it, rather it is required to wait for a lunar year…” (Ali Jad al-Haq, 2004). The Fatwa Committee of the State of Perak is among the authorities that does not follow the mainstream fatwa. In a long statement of the fatwa they maintained that salary and wages are subjected to zakat when the hawl passess and they accept the
hadith: “Anyone who acquires an income, there is no zakat imposed on it until the hawl has passesed”.
There is also a special scheme in Malaysia called salary deduction scheme which has been in practice. In this scheme the worker can pay zakat by deducting his monthly salary and there are some employers make it compulsory. The issue arise here is two, namely, the issue of hawl and nisab. There are some and even many of the employee whose income does not reach the nisab level but they have paid their zakat via this scheme. In this case they do not meet both the requirement of hawl and nisab. For those whose income has reached nisab might be not have a juristic problem here since the jurists accept paying zakat in advance before the hawl passed as discussed earlier.
Suryani Masnan in her study has advised that even if the authority resorts to the view of al Qardhawi of ignoring hawl in zakat of al mal al mustafad they have to make sure that only those who are in position of reaching nisab that pay the zakat. Otherwise the zakat is not valid. To ignore hawl in the sense that to pay zakat in advance optionally is acceptable by some schools and the zakat is valid but to pay before reaching the nisab is not acceptable.