Righteous Economy Islamic perspective of wealth and economics Instructor:Dr.Hajredin Hoxha –Qatar University 2013 بسم الله الرحمن الرحيم Presentation on by Mohammed Mudassir Hoque & Muhammad Faraz Khan

Outline Overview of Islamic Economy Foundation of Islamic Economy Primary Goals of Islamic Economy References & Further Reading © Mohammed Hoque (2013)2

Overview of Islamic Economy © Mohammed Hoque (2013)3

Foundations of Islamic Economy Encouraging business and all other kinds of permissible work Forbidding all unlawful work Implementing Zakat Public funds for public welfare Laws of inheritance and redistribution of wealth © Mohammed Hoque (2013)4

Primary Goals of Islamic Economy Self-sufficiencyEfficient use of resourcesGrowth of individuals and societyReducing the gap between the rich and poorSocial welfare and social securityFair redistribution of wealth © Mohammed Hoque (2013)5

Establishment of Islamic Economy  “and establish prayer and give zakah and loan Allah a goodly loan.” Quran, 73:20  Quran, Surah Al Baqarah, 2: describes the Islamic rulings for buying/ selling and all forms of exchanges © Mohammed Hoque (2013)6

Key Terminologies Zakat: growth; (obligatory) purifying almsSadaqah (waqf): (vlountary) charitable donationsRiba: any increase in repayment of loan, generally, interest. Jizya: a poll tax imposed on non Muslims who are defeated in jihad and stay under the Islamic state's authority in exchange for their protection and security Tax: a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state © Mohammed Hoque (2013)7

Key Terminologies Nisab: is the minimum amount that a Muslim must own before he is obligated to give zakat. Khums: refers to a religious obligation to contribute one-fifth of a certain type of income to charity; applicable to spoils of war Bayt al-mal: “House of Wealth”; a financial institution responsible for the administration of taxes in Islamic states, particularly in the early Islamic Caliphate © Mohammed Hoque (2013)8

Forbidding Riba (Interest and Usury) And whatever you give for interest to increase within the wealth of people will not increase with Allah. But what you give in zakah, desiring the countenance of Allah - those are the multipliers (Quran, 30:39). O you who have believed, do not consume usury, doubled and multiplied, but fear Allah that you may be successful (Quran, 3:130). © Mohammed Hoque (2013)9

Collection of Zakat Zakat is an obligatory charity, which is only collected from Muslims, who have wealth equivalent to Nisab (after meeting his necessities) Value of Nisab is about 85 grams of gold or 595 grams of silver No Zakat is due on wealth until one year passes from the day of acquiring the wealth © Mohammed Hoque (2013)10

Zakatable items  Zakatable items include – livestock, gold, silver, currency, jewelry, commercial assets, agriculture, honey, animal products, mining, fishing, rented buildings, plants, fixed capital, salaries, wages, professional incomes, bonds, stocks, shares  In general, growing assets are zakatable  There are exceptions to specific jewelry used by women such as pearls and other precious stones. Detailed information can be found in books of Fiqh. © Mohammed Hoque (2013)11

Categories of Zakat Recipients as Mentioned in the Quran “Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah. And Allah is Knowing and Wise.” Quran, 9:60 © Mohammed Hoque (2013)12

© Mohammed Hoque (2013)13

Inheritance  The Quran and Sunnah explain in detail about how property and wealth should be distributed among the relatives after the death of a Muslim.  The Shariah also commands to fulfill the liabilities and testaments of the deceased before the wealth is redistributed amongst the relatives. © Mohammed Hoque (2013)14

Scholars differ on the issue of Taxes  State taxes are not religious obligations  Taxes should only be collected if there are no alternatives for the general welfare of the country such as building roads, schools, hospitals and so on.  All taxes must be used explicitly for the benefit of the people © Mohammed Hoque (2013)15

Production in Islamic States  Business: Allah has prohibited Riba and permitted business  Jobs: People are encouraged to work righteously to earn their living  Manufacturing: many Muslim countries depend on non Muslim countries for many products. Muslims should strive to be self-sufficient © Mohammed Hoque (2013)16

Encouraging People to Work  “The upper hand is better than the lower hand (i.e. he who gives in charity is better than him who takes it).” Sahih Bukhari © Mohammed Hoque (2013)17

Forbidding the unlawful trades Riba: interest Hoarding: stock up anything that the people need in order to sell later for higher profit Deceit: using deceptive means to sell products Trading in haram things: trading alcohol, pork, and other haram things Extravagance: wasting money, property, unnecessary luxury © Mohammed Hoque (2013)18

Prohibitions & Permitted © Mohammed Hoque (2013)19 HaramHalal Riba (Interest) Hoarding Deceit Trading in haram things Extravagance Honest business activities Profit gained through business All kinds of jobs (that are not explicitly forbidden) Trading permissible goods Earning profit without cheating Moderate in spending

Benefits of Islamic Economy © Mohammed Hoque (2013)20

References & Further Reading  Ideal Muslim Society by Muhammed Ali Hashimi  Fiqh al Zakah by Yusuf Qaradawi  Introduction to Islam by Yusuf Qaradawi  Production and Economic Development published by islamweb.net © Mohammed Hoque (2013)21