- Islam
has a unique system of taxation where there is no
taxation of the poor. There are only three types
of regular taxes levied from those people who are
able to pay:
- Jizyah
- Is a tax on mature male non-Muslim citizens
who are able to pay it. This is much less than
any tax on Muslim citizens.
- Ushr
- Is a tax levied on unconquered land under
the jurisdiction of the State, at the rate of one
tenth of the produce if the land is irrigated by
rain, or one twentieth if it is artificially
irrigated.
- Kharaj
- Is a tax levied on conquered land, whose
rate is fixed by the Khaleefah.
- There
are no income taxes.
- There
is no Value Added Tax (VAT).
- There
are no Death Duties.
- There
is no Road Tax.
- All
these examples are included among the taxes in
the West where it is the poor that suffer the
most.
- The
Khaleefah Umar ibn Abdul Aziz at one stage
could not find a poor person to give zakat to
during his rule (7th Century CE).
- In
the entire history of Spain, it was economically
at its most prosperous during the period of
Islamic rule. Never before or since has it been
so successful.
- Under
Islam, Africa sent food to relieve famine in
Madinah. The Khaleefah - Umar ibn al-Khattab
sent the following letter to Amr ibn al-Aas,
the governor of Egypt regarding the means of
transporting the supplies :
"Arrange to dig the canal from the River
Nile up to the Sea even if you have to spend the
entire treasury of Egypt in the undertaking."
Zakat is not part of the Islamic economic
system.
- Public
resources such as sources of water like rivers
and lakes, sources of energy like electricity,
and public utilities like parks, roads and
railways cannot be privatised according to the
wishes of the government. They remain public
property as originally classified by Islam
according to their nature. They will always
remain public and cannot be owned by individuals
who may charge excessively and prevent the vital
requirements of the people getting to them, as
happens in the West.
- It is
compulsory on the husband to work to earn nafaqah
(provision) for his family, but if he cannot
do so for any genuine reason, it is the
responsibility of the State to provide tangible
basic needs of food, clothing, shelter; and
intangible needs of education, health and
security. Hoarding of wealth is prohibited, even
if you are willing to pay zakat on it.
This makes it available for the markets, boosting
the economy and preventing the wealth from merely
making a circuit amongst the rich.
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- Currency
in the Khilafah can only be based on gold and
silver. Thus it will be of real value itself,
providing stability in the economy. It cannot be
reproduced or destroyed, which would cause
devaluation and inflation.
- The
Islamic system has 5 types of company structure :
anan, abdan, mudharaba, mufawadha
and wojooh.
- Anan
(Company of Equals) - Partnership between two
people, both contributing capital and effort.
- Abdan
(Company of Bodies) - Company in which two or
more persons participate by their effort only,
without their capital.
- Mudharaba
(Company of Capital and Effort) - A company
in which one part provides the capital while the
other provides the effort.
- Wojooh
(Company of Faces) - A company involving two
or more parties who provide the effort with
another party who guarantees the financial
support.
- Mufawadha
- This is a company which combines any of the
other 4 types of company structures permitted by
Islam.
- Stocks
and share companies (Plcs) are not allowed
in Islam as they do not fall into any of the
permitted categories, having an incorrect company
structure, and so are invalid.
- The
Islamic economy focuses on ensuring the effective
distribution of created wealth and resources,
rather than amassing these in useless stockpiles.
Thus the satisfaction of the basic necessities of
food, clothing and shelter for all citizens be
they Muslims or non-Muslims is the priority.
- If
you find derelict land anywhere you may make use
of it without anyones permission.
- In
the 8th and 9th century, Iraq under Islam had a
population of 30 million (compared to 18 million
today). 80% were farmers with modern irrigation
systems from the rivers Tigris and Euphrates. The
ratio of yield of seed for wheat in the Muslim
world was 10:1 at this time compared to only 2.5:1 in
Europe.
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