Sunday, May 31, 2009

ZAKAT ON BUSINESS

Obligation of zakat on business is derived from the Qur’an and Sunnah. Allah says, “O you who believe! Spend of the good things which you have earned...” (al-Baqarah, 2: 267). According to al-Tabari, “spend of the good things you have earned” refers to economic activities such as the business sector. Imam al Jassas and Imam Abu Bakr ibn al ‘Arabi have been reported to assert the same opinion (Al-Qaradawi, 1999: 204).

Abu Dawud reported from Samurah ibn Jundub, “The Prophet (pbuh) used to order us to pay the sadaqah (zakat) on what we have prepared for trade” (Abu Dawud, 1557). There is also a report from Abu ‘Amr ibn Hammas, from his father, who said “Umar passed by me and said, ‘Oh Hammas, pay zakat of your possession (wealth)”. I said, “I have nothing except hides and bags. He said, “Determine the price of these things and then pay their zakat” (Abu ‘Ubayd, 1991: 362).

Abu Ubayd reported from Maimun ibn Mihran as saying, “At the time of your payment of zakat, estimate your cash and commercial good, determine the price of your commercial goods in cash, the remaining is your debts from your customers (with the opinion that it will be collected) and minus your own debt, and then pay zakat on the balance” (Abu Ubayd, 1991: 362).

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