Friday, February 27, 2015

COST OF LIVING AND PRODUCTION COSTS


In the Holy Qur'an, it was mentioned in general, that zakat is compulsory on agricultural income. Among others is Allah said, “Eat of their fruit when they ripen, but pay the due thereof on the day of their harvest” (al-An’am, 6: 141).

According to Ibn Kathir (2001: 239), Muhammad b. Ka`b said that eat from the dates and grapes they produce, Allah said next, but pay the due thereof on the day of their harvest. Mujahid also commented, when the poor people are present (on the day of harvest), give them some of the produce.

The method of zakat assessment on agricultural produce is assessed based on the surplus and more than the needs. Allah mentioned in the Holy Quran: “And they ask you what they ought to spend (infaq). Say: That which is (spare) beyond your needs” (al-Baqarah, 2:219).

In addition, Ibn Kathir (1993: 132) mentioned, “and they ask you what they ought to spend”, Ibn Abbas said that this ayah means, whatever you can spare above the needs of your family. This is also the opinion of Ibn Úmar, Mujahid, Ata, Ikrimah, Sa`id b. Jubayr, Muhammad b. Ka`b, Al-Hasan, Qatadah, Al-Qasim, Salim, Ata Al-Khurasani and Ar-Rabi b.Anas.

Muslim reported from Jabir, Allah's Messenger said to a man as follows: “Start with yourself and grant it some charity. If anything remains, then spend it on your family. If anything remains, then spend it on your relatives. If anything remains, then spend it like this and like that (i.e., on various charitable purposes)” (Ibn Kathir, 2001: 133).

In classical literature, the cost of living is debated with reference to the debt issues. Among others is Abu Úbayd (2006) in kitab al-Anwal. For instance, Abu Úbayd reported from Ibrahim b. Sa’d, from Ibn Shibab, from Ibn Said Al-Yazid, the Caliph Úthman b. ‘Affan said as follows: “This is the month of zakat. Whoever is indebted, he should first pay his debt, so that he may be able to pay his zakat (if due). Whoever has not (zakatable) possession, no zakat will be taken from him. However, he can do so voluntarily. Who will pay his zakat nothing will be taken from him in the next year before the start of this month. Ibrahim: here by month means the month of Ramadan (in which zakat is paid)” (Abu Úbayd, 2006: 372).  

Abu Úbayd (2006) has discussed this Hadith in detail, focusing on two main issues, which are cost of plantation and cost of living. With reference to these costs, Abu Úbayd reported from Jabir Ibn Zayd said as follows: “Ibn ‘Abbas concerning a person, who spends the amount the amount loaned on his family or land, said that he would pay the loan taken for land (i.e, he would deduct it from zakat). Ibn Úmar concerning such person said that he would pay the loan spent on himself or his family” (Abu Úbayd, 2006: 424).

Abu Úbayd (2006) argued that the cost of production and cost of living can be fully deducted from the gross agricultural produce. Similar views were shared by Ibn Úmar and Ibn Abbas where the cost of plantation is deductible from the gross income. Based on the argument by Abu Úbayd (2006) it can be concluded that farming costs and living costs are allowed to be deducted from the gross income. This was due to the fact that Ibn Úmar allow the deduction of living costs while Ibn’ Abbas allows the deduction of farming costs.

Actually, Abu Úbayd holds the view of Ibn Úmar which can be traced from the conclusions made by Abu Úbayd as follows: “If it is known that the owner of the land is actually indebted, the zakat will not be taken from his produce of land, and it will be exempted from him because of his loan. This is according to the opinion of Ibn Úmar, Ta’us, ‘Ata and Makhul.

This is in according with the Sunnah also because the Prophet (peace be upon him) has prescribed that zakat will be taken from the rich and distributed among the poor. How can zakat be collected from a person is indebted equal to his possession, i.e. he has no possession and is entitled to receive zakat? How is it possible that he may be rich as well as poor at same time? Moreover, he (the indebted person) is one of the beneficiaries of zakat (i.e. Gharim) and is entitledto receive zakat in two capacities (i.e. being poor an indebted) (Abu Úbayd, 2006: 425).

According to Abu Úbayd (2006) zakat is to be taken from the rich and distributed among the poor. In addition, question trigger on how zakat is collected from a person who is indebted? Is it possible that the person may be rich as well as poor at same time? Abu Úbayd (2006) further argued that indebted person is one of the beneficiaries of zakat and is entitled to receive zakat in two capacities (i.e. being poor and indebted). Additionally, it was also the views from Iraqi’s Islamic scholars who hold the opinion of Ibn Úmar, Tawus, Áta and Makhul (Abu Úbayd, 2006: 424).

As mentioned by Yusuf al-Qaradawi (1999), Ibn ‘Abbas views debts spent on the land must be paid back first, but views from Ibn Úmar is both debts on farming and family must be deducted. Both of them agreed that debts on farming are deductible, but both disagree on deducting debts for family and personal use. He concluded that the decision made by Prophet varies according to the difference in effort expended in irrigating the land.

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