Zakat and Tax; same things but why difference

[hassan zohaib]

Zakat is an Islamic alternative system of modern Tax collection system. More or less both have the same objectives but in nutshell both are directed for the welfare of masses, both enjoy the same type of importance but totally are pursued in different ways through different institutions and most importantly both have different status attached with them.
In any islamic society Zakat has been given the utmost importance and even the Islam has given itself so much importance by including this in the basic tenets of Islam i-e 5 Bunyadi Arkan of Islam like Toeed, Namaz , Roza , Zakat and Hajj. which clearly shows how much Islam has given importance to Zakat not only because of individual perspective but also because of the society and the administration point of view as well. unfortunately in almost all Islamic countries both are pursued side by side especially in Pakistan.
Tax is mandatory by law for every eligble person so has been backed by administration but on the other hand, Zakat has been left to the individual`s discretion, which should not be, and to some extent to forced Zakat like in case of bank`s saving accounts. Leaving aside all religious perspectives, the issue which i want to raise is from totally economic perspective. we know that the Importance of zakat so why do we pursue both side by side. By doing this we are actually causing double taxation and infact hurting the people`s will and confidence in tax collection system or vice versa. if somebody is paying tax then he thinks why he should pay Zakat or otherwise hence tax avoidance or zakat avoidance which both are negative for the individual and society as well. so my question is why should not we pursue one of these with full backing of Govt and religion in Pakistan? By doing so we can collect more revenues than the present collection because if the system would have backing of religion as well as Govt then we would likely to follow the one and only structure to fullfill our religious as well as moral and legal duty.
no doubt this system or topic requires research but for now it is for debate initiation.

your views are invited because i know which i dont know might someone other know or perhaps we can both know. so write your comment.

 

[Danish saleem]

Zakat and tax is not a same brother,

Zakat will be paid on Assets, but tax paid on circle of money.

there is major difference between the two.

 

[Awi]

Zakat is an Islamic alternative system of modern Tax collection system. More or less both have the same objectives but in nutshell both are directed for the welfare of masses, both enjoy the same type of importance but totally are pursued in different ways through different institutions and most importantly both have different status attached with them.
In any islamic society Zakat has been given the utmost importance and even the Islam has given itself so much importance by including this in the basic tenets of Islam i-e 5 Bunyadi Arkan of Islam like Toeed, Namaz , Roza , Zakat and Hajj. which clearly shows how much Islam has given importance to Zakat not only because of individual perspective but also because of the society and the administration point of view as well. unfortunately in almost all Islamic countries both are pursued side by side especially in Pakistan.
Tax is mandatory by law for every eligble person so has been backed by administration but on the other hand, Zakat has been left to the individual`s discretion, which should not be, and to some extent to forced Zakat like in case of bank`s saving accounts. Leaving aside all religious perspectives, the issue which i want to raise is from totally economic perspective. we know that the Importance of zakat so why do we pursue both side by side. By doing this we are actually causing double taxation and infact hurting the people`s will and confidence in tax collection system or vice versa. if somebody is paying tax then he thinks why he should pay Zakat or otherwise hence tax avoidance or zakat avoidance which both are negative for the individual and society as well. so my question is why should not we pursue one of these with full backing of Govt and religion in Pakistan? By doing so we can collect more revenues than the present collection because if the system would have backing of religion as well as Govt then we would likely to follow the one and only structure to fullfill our religious as well as moral and legal duty.
no doubt this system or topic requires research but for now it is for debate initiation.

your views are invited because i know which i dont know might someone other know or perhaps we can both know. so write your comment.

Zakat is made obligatory for riches (Muslims) by Allah, and Allah only will punish individuals for not paying. So State can not judge nor punish for not paying Zakat. While tax is a state imposed obligation that also is favored under Sharia for running the matters of the state, which means State can judge citizens and punish for not paying taxes.
Zakat can only be used for the poor and miskins (Muslim kids with no fathers) of the State. While tax will be used in running state matters and also for the maintenance, improvement and development of infrastructure and betterment of the life style of it's citizens without any preference.

You said to leave religion aside, if so then what's the point of discussing Zakat? then only talk about Tax, it's implementation and recovery. that's the reason you have never heard of any Muslim state enforcing Zakat.

If you make Zakat obligatory and leave out tax, then it's not Zakat as it will have to be paid by everyone, and will be used for every citizen of the State (Zakat is only for Muslims benefit).
If you make Tax obligatory and leave out Zakat, well then what can i say, this is the system every where bro. Zakat is left for individual citizens to decide if they have to pay or not. Don't miss judge regulations with law, a lot of Banks and State departments regularize (or just collect and distribute Zakat). That's still on individuals discretion if he/she wants to pay or not, State and Banks are only facilitating you and not enforcing you as per my understanding.

 

[jupiter2007]

Zakat and tax is not a same brother,

Zakat will be paid on Assets, but tax paid on circle of money.

there is major difference between the two.

I agree, Zakat is paid on earning kept for over one year and it's 2.5%

 

[Skyliner]

Zakat is the charity that is given in a specific percentage amount from one’s extra wealth, And taxes are for collecting revenues to run and administer Govt. They both fall in diff category and are for diff purpose.

 

[shhh]

This is a misconception.
Zakat and Tax are not same and serve a different purpose.
Zakat is not obligatory on all Muslims, it is not even obligatory on rich Muslims, it is obligatory on the people that have "saved" money for a year, that too if the saving exceeds a certain amount.
In Pakistan, this amount was 50K+ last year.
In addition to that, Zakat is also applied on property that you own, such as jewelry, house, car, etc.
However if the additional property you own is for your private use then Zakat is not applied on it.
For example, if you own two houses and you use both for normal living (like if you have given the second house to some relative to live), then Zakat is not applied on the second house.
However If you intend to make money with the second house, then Zakat will be applied on the second house.

Tax on the other hand is different all together and serves a different perspective.
There are many types of taxes.
Such as Income tax, Sales Tax, Import Tax, Export Tax, etc.

Zakat is applied on "Savings". This is important to note, because you only have "Savings" after your basic needs have been fulfilled.

Tax is paid on the events, Income tax for example, is paid when you earn (which sure is a burden on you).

Taxes and Zakat are both valid under Islam and Shariah. As long as the taxes are in compliance with Shariah itself.

Hope that clears things up.

 

[Danish saleem]

This is a misconception.
Zakat and Tax are not same and serve a different purpose.
Zakat is not obligatory on all Muslims, it is not even obligatory on rich Muslims, it is obligatory on the people that have "saved" money for a year, that too if the saving exceeds a certain amount.
In Pakistan, this amount was 50K+ last year.
In addition to that, Zakat is also applied on property that you own, such as jewelry, house, car, etc.
However if the additional property you own is for your private use then Zakat is not applied on it.
For example, if you own two houses and you use both for normal living (like if you have given the second house to some relative to live), then Zakat is not applied on the second house.
However If you intend to make money with the second house, then Zakat will be applied on the second house.

Tax on the other hand is different all together and serves a different perspective.
There are many types of taxes.
Such as Income tax, Sales Tax, Import Tax, Export Tax, etc.

Zakat is applied on "Savings". This is important to note, because you only have "Savings" after your basic needs have been fulfilled.

Tax is paid on the events, Income tax for example, is paid when you earn (which sure is a burden on you).

Taxes and Zakat are both valid under Islam and Shariah. As long as the taxes are in compliance with Shariah itself.

Hope that clears things up.

saving is assets, that why i already said its paid on the value of assets, once a year.

so you cant compere Zakat with Tax.

Yes in Islam only Tax is Mahsool , which will charge on Import and Export of Product, like today in Dubai and Saudi.

 

[BATMAN]

Zakat and tax is not a same brother,

Zakat will be paid on Assets, but tax paid on circle of money.

there is major difference between the two.

Tax is paid on property as well and so is Zakat in parallel on same property.
Any case Pakistani Muslims have to pay both...tax & Zakat. This makes Pakistani Muslims, as highest tax payers in entire globe.
In addition we can count, sales taxes, various surcharges, tols, charity hospitals, charity mosques, charity to poors, co-operative development fundings, increased spending in private life due to lack of good infrastructure and poor quality of food etc. etc.

In short, Pakistan is heaven for international lenders like IMF/ world bank etc.

P.S.: Not every citizen of Pakistan pay Zakat.

 

[X-2.]

Zakat is an Islamic alternative system of modern Tax collection system. More or less both have the same objectives but in nutshell both are directed for the welfare of masses, both enjoy the same type of importance but totally are pursued in different ways through different institutions and most importantly both have different status attached with them.
In any islamic society Zakat has been given the utmost importance and even the Islam has given itself so much importance by including this in the basic tenets of Islam i-e 5 Bunyadi Arkan of Islam like Toeed, Namaz , Roza , Zakat and Hajj. which clearly shows how much Islam has given importance to Zakat not only because of individual perspective but also because of the society and the administration point of view as well. unfortunately in almost all Islamic countries both are pursued side by side especially in Pakistan.
Tax is mandatory by law for every eligble person so has been backed by administration but on the other hand, Zakat has been left to the individual`s discretion, which should not be, and to some extent to forced Zakat like in case of bank`s saving accounts. Leaving aside all religious perspectives, the issue which i want to raise is from totally economic perspective. we know that the Importance of zakat so why do we pursue both side by side. By doing this we are actually causing double taxation and infact hurting the people`s will and confidence in tax collection system or vice versa. if somebody is paying tax then he thinks why he should pay Zakat or otherwise hence tax avoidance or zakat avoidance which both are negative for the individual and society as well. so my question is why should not we pursue one of these with full backing of Govt and religion in Pakistan? By doing so we can collect more revenues than the present collection because if the system would have backing of religion as well as Govt then we would likely to follow the one and only structure to fullfill our religious as well as moral and legal duty.
no doubt this system or topic requires research but for now it is for debate initiation.

your views are invited because i know which i dont know might someone other know or perhaps we can both know. so write your comment.

It's not same ... zakat is charge on total percentage of total assets liquid or solid while tax gets higher as compare to Malay plus tax is charged on almost all goods n stuff

 

[PakSword]

Zakat and tax are two different things:

1- Zakat is obligatory on a Muslim regardless of his/ her nationality. Tax is a requirement from government on the individuals of a country regardless of their religion.

2 - Zakat is paid on wealth kept as investment assets (not trading assets) above certain value, whereas Tax is mostly paid on income. This is a major difference. If a person earns Rs. 100,000 per month but his family is very big and he doesn't save anything after family support and therefore doesn't have any assets over and above his requirement (for example his house in which he lives, his trading commodities etc etc), he is not required to pay Zakat. But according to man made laws, he is required to pay income tax. On the other hand, another man has an income of Rs 25000 but he lives alone and only spends 5000 on him, rest he saves. He is required to pay very less tax (or nil tax), but as he saves money, he is subjected to more Zakat than the person who earns 100,000 and spends all due to large family size.

3 - Zakat can only be paid to poor Muslims who do not have enough to support themselves and their families. Tax can be used by government as it thinks necessary. Government can spend tax on infrastructure development, healthcare, education etc etc. Zakat should be paid very carefully as nowadays, people just pay the zakat to relieve their annual responsibility. I have seen people paying zakat to their maids who enjoy every facility in their homes. There was a maid in our area who had dish antenna, LCD screen, deep freezer (in which she used to keep meat collected on Eid ul Adha). People used to give her Zakat without even visiting her house. She had a husband who worked as an electrician and he used to earn money as well. What I meant to say is Zakat should be paid to real needy person not just anyone.

4 - Zakat is sometimes not required to be paid if the person is in immense debt and selling all his assets will not be able to cover his debts. He is first required to pay off all the debts and then continue with Zakat. Income tax is paid regardless you have a loan or not.


There are other differences that I have not listed but above four points are enough in my opinion to explain the major differences. There are other members who have explained very well in posts above as well.

 

[Thorough Pro]

Zakat is on Wealth and used only for the welfare of poor
Tax is on earnings and can be used on anything that government deems fit

 

[Zibago]

Zakat and tax is not a same brother,

Zakat will be paid on Assets, but tax paid on circle of money.

there is major difference between the two.

Only rich pay zakat but everyone pays taxes

 

[The Accountant]

Zakat is an Islamic alternative system of modern Tax collection system. More or less both have the same objectives but in nutshell both are directed for the welfare of masses, both enjoy the same type of importance but totally are pursued in different ways through different institutions and most importantly both have different status attached with them.
In any islamic society Zakat has been given the utmost importance and even the Islam has given itself so much importance by including this in the basic tenets of Islam i-e 5 Bunyadi Arkan of Islam like Toeed, Namaz , Roza , Zakat and Hajj. which clearly shows how much Islam has given importance to Zakat not only because of individual perspective but also because of the society and the administration point of view as well. unfortunately in almost all Islamic countries both are pursued side by side especially in Pakistan.
Tax is mandatory by law for every eligble person so has been backed by administration but on the other hand, Zakat has been left to the individual`s discretion, which should not be, and to some extent to forced Zakat like in case of bank`s saving accounts. Leaving aside all religious perspectives, the issue which i want to raise is from totally economic perspective. we know that the Importance of zakat so why do we pursue both side by side. By doing this we are actually causing double taxation and infact hurting the people`s will and confidence in tax collection system or vice versa. if somebody is paying tax then he thinks why he should pay Zakat or otherwise hence tax avoidance or zakat avoidance which both are negative for the individual and society as well. so my question is why should not we pursue one of these with full backing of Govt and religion in Pakistan? By doing so we can collect more revenues than the present collection because if the system would have backing of religion as well as Govt then we would likely to follow the one and only structure to fullfill our religious as well as moral and legal duty.
no doubt this system or topic requires research but for now it is for debate initiation.

your views are invited because i know which i dont know might someone other know or perhaps we can both know. so write your comment.

There is a huge difference in mechanism ... Zakat is on savings and stocks in hand as a result zakat is pro economic development .. If a person earns millions but inbest it back in business and do not keep the profit or stock jn hand below threshhold amount then he do not has to pay zakat ... As a result system of zakat encourage investments and forces rich to keep on investing hence genrating employment opportunities and growth in economy at much faster pace


On contrary tax is on profit ... So whatever you have earn you have to give a portion of it to gov ... So it deprives yyou off the amount that could be reinvested for business growth ...

Also rate of zakat is much lower to tax rate ...

 

[Danish saleem]

Tax is paid on property as well and so is Zakat in parallel on same property.
Any case Pakistani Muslims have to pay both...tax & Zakat. This makes Pakistani Muslims, as highest tax payers in entire globe.
In addition we can count, sales taxes, various surcharges, tols, charity hospitals, charity mosques, charity to poors, co-operative development fundings, increased spending in private life due to lack of good infrastructure and poor quality of food etc. etc.

In short, Pakistan is heaven for international lenders like IMF/ world bank etc.

P.S.: Not every citizen of Pakistan pay Zakat.

brother,

Zakat is your choice, to whom which u wanted to pay, its not government choice.
but tax is compulsory, you cant pay upon your choice, nor utilize upon your choice!

we cant compere both.

 

[Bouncer]

On contrary tax is on profit ... So whatever you have earn you have to give a portion of it to gov ... So it deprives yyou off the amount that could be reinvested for business growth ...

You pay Zakat to help the poor. And you pay tax to help YOURSELF. Roads, security, medicine, public services etc are not paid for by Zakat. Your tax pays for them. So be a good citizen and pay both as per the law.