Institutional Framework of Zakat: Dimension and Implications

Institutional Framework of Zakat: Dimension and Implications


The Emir Sanusi Lamido Sanusi  

Being text of a lecture delivered at a symposium on “Essentials for Building an Islamic Ummah” held at Katuru Road Mosque, Ungwar Sarki, Kaduna on Saturday 2/12/2000.

Assalamu Alaikum wa Rahmatullah wa Barakath

I thank this centre for once more honouring me with the invitation to present a lecture in your annual Ramadhan series. I have been asked to speak on three areas:

1.                 Injunctions on zakat;

2.                 Need for collective system of zakat; and

3.                 Contemporary issues on zakat.

Permit me to do away with the first item on the list above since I have no doubt that all Muslims know, of necessity, that zakat, like the shahada, prayer, fasting and Hajj, is one of the five pillars of Islam and obligatory on every Muslim. I therefore crave your indulgence to proceed to the other two items which are more likely to add value to our collective understanding of the subject matter.


The collection of Zakat is a responsibility of the Islamic State, and this is established in the Quran, Sunnah, actions of the salaf as-salih and rational analysis.  Before I proceed to mention the sources corroborating this position, I would like to address a question which I am often asked.  In the absence of an “Islamic State” in Nigeria, who should take responsibility for Zakat collection and to whom should Muslims pay?

My view, and Allah knows best, is that all those persons who are recognized by the generality of people in their areas as the leaders of the Muslim community have responsibility for collection of zakat.  In this part of the country, for example, the Emirs who appoint the Imams of Jumu’at mosques and to whom the masses give allegiance as the de facto Imams, are in my opinion responsible for  this pillar of Islam and answerable before Allah on the Day of Judgement as to what they have or have not done to establish a collective system for zakat collection and administration. Where state governments have officially adopted “shariah”, this responsibility becomes theirs.  In what follows, we will assume when we say “state” we are referring to an Islamic Government, an Imam (in the sense of leader or emir) or an organisation which represents the collective interest of the Muslim people in a non-Muslim society (such as Muslim Unions and societies in the western world).

As mentioned above the collective nature of the zakat system in Islam is established by Qur’anic texts and Prophetic Hadiths.  Among the most explicit is the ayah “Take sadaqa from their wealth to purify and cleanse them” (9:103).  The word “take (khudh)” makes it clear that the addressee has both the authority and responsibility for collection. He is instructed to “take”.  By that one instruction, he is obliged to ‘take’ and those from whom it is to be taken are obliged to give.  The injunction was to the Messenger of Allah in his capacity as Head of State and therefore to his successors in that capacity.  This is why the Caliph Abu Bakr waged war against the Arab tribes who refused to pay zakat.  When ‘Umar questioned his judgement in fighting believers he replied “By Allah, I shall fight those who differentiate between salat and zakat.  Zakat is the right due on wealth.  By Allah, if they refused to give me one baby goat they used to give the messenger of Allah as zakat, I shall fight them for it.”

A second verse which makes clear this nature of zakat collection and administration is the verse which limits the beneficiaries of zakat to eight categories (9:60).  In this verse, specific mention is made of “those who collect (or work at) it” (al-ʿaamiliina ʿalayha) and from this, it is clear that the collection is a process handled by an institution with employees who are actually paid for services rendered from the proceeds of zakat.  That these workers, known as su’at, are appointed by the state is established in many hadiths.  Both Bukhari and Muslim report from Abu Hurayra that the Prophet sent ‘Umar as a collector of zakat, and from Abu Humayd that the Prophet sent Ibn al-Lutabiya as a collector.  Indeed, there is a very large collection of hadiths recording the names of the su’at the prophet sent at different times to different tribes.  Among them ‘Uyayna Ibn Hisn to the Banu Tamim, Burayda Ibn Al-Hasib to Aslam and Ghifar, ‘Abbad Ibn Bishr al-Ashhali to Sulaym and Muzayna, Rafi’ ibn Makith to Juhayna,’Amr ibn al-‘As to Fazara, al-Dahhak ibn Sufyan al-Kilabi to Banu Kilab, Busr ibn Sufyan al Ka’bi to Banu Ka’b and several more as listed by Ibn Sa’d in his Tabaqat. What this tells us is that as an ummah, we have a responsibility for establishing an organised structure for zakat. The fact that those who are liable for zakat payment are not necessarily able to compute it properly and/or willing to pay it in full, if nothing else, makes it imperative. After all, governments have tax offices with assessors who are responsible for collecting taxes based on the same logic.

There will always be disagreements as to who should act for the Imam in this respect. A number of organisations have sprung up with efforts at establishing a zakat fund, or a system for collecting and administering zakat. Commendable and desirable as this is, I propose to raise a few points.

First, the Imamate is a political, as well as religious office. The Emirs and now the governors of the states which have adopted sharia formally have taken up the responsibility of administering zakat. The task, like the Imamate itself, is a fardh – kifayah, so, if these persons/governments set up a machinery for zakat collection, the responsibility falls off from the rest of the ummah. Our task will be one of assisting, advising and giving zakat.

There is a second point, however, which is often mentioned as a basis for not paying zakat to these institutions. It is the conviction often expressed that the funds are misapplied or that the promoters of the bodies are not ”good Muslims”. Apart from the serious implication of these allegations without evidence in law, the truth is that even if they were established, there would be no justification for not paying them. This point was covered extensively by al-Nawawi in his majmu’. Sahl ibn Abi Salih reports from his father: “I accumulated a zakatable amount of wealth. I asked Sa’id ibn Abi Waqqas, Ibn ‘Umar, Abu Hurayra and Abu Sa’id al – Khudri whether I should distribute zakat myself or give it to the government. They all said, “give it to the government”. In one version, he said, “don’t you see what this government does?” It was the time of the Umayyads. “Should I still give them my zakat?” They all answered, “Yes, you must.” A report by al-Bayhaqi from Ibn Umar has him as saying, “Give them your zakat even if they drink wine”. The same al-Bayhaqi reports that one of Mughira ibn Shu’ba’s slaves withheld some zakat from the Umayyad government and paid it himself because “they buy land and marry women with what we give them”. Mughira ordered him thus: “give it to the government, for the messenger of Allah (S.A.W.) ordered us to give it to them”. Ibn Umar also said, “Pay your sadaqa to whoever runs your affairs. If he does right, it is his soul that will be rewarded and if he does evil, it is on himself”.

It is therefore clear that the best option before us is to call on our leaders and assist and cooperate with them in the performance of this task. We now move to some contemporary issues in zakat.

Contemporary Issues of Zakat

I would like to separate this part of the paper into two sections. The first deals with old questions which have contemporary relevance. The second with the new questions that arise in our contemporary world.

A. Old questions, New times

As states in this part of the country adopt the Sharia legal code, it is likely that several will follow the example of Zamfara State in adopting Maliki law as the official code for their statutes. Maliki law as far as zakat is concerned has many strong points, especially if it is sourced from diverse sources within the mazhab, taking cognisance not only of the various commentaries on the Muwatta and Mudawwana, but the opinion of scholars like Qurtubi, Ibn Abd al-Barr, Ibn Rushd and Ibn ‘Arabi, along with the views of predecessors like Malik, Ibn al-Qasim, Ashhab, Asbagh and Suhnun, among others.

Of interest to me are two questions which I believe need consideration in these times, especially given the fact that that Agriculture is the mainstay of the Northern economy. These questions are old and from the time of the founders of the various Schools of Thought there has been disagreement on them. I propose here that when we consider  the issues and the arguments and the nature of contemporary society, we will find it appropriate to move from the traditional Maliki position that of other schools in these matters.

The first question deals with the range of agricultural products from which zakat (ushr) is obligatory.  Malik and Shafii limit this range to edible and preservable items only.  This excludes perishables, vegetables, fruits and cash crops.  Since “edible” crops are used in the sense of being primary food crops on which man can subsist like rice, corn and millet; the implication of this is that there is no zakat on cotton, tomatoes, potatoes, onions and all such crops which are cultivated in large quantities all over the North except in so far as the proceeds from their sale forms part of zakatable earnings or the inventory at year end forms part of “trading goods”.  In both cases, the zakat is 2.5% of value as opposed to 10% (or 5%) for produce. Not only that, it is 2.5% of residual value (what is available after expenses) as opposed to the zakat on produce which is a fraction of total harvest.

Ibn Hanbal prescribes zakat on a broader range of crops by leaving out the “edibility” condition.  According to him, any crop that is non-perishable, can be dried and can be measured in zakatable.

The strongest position however is that taken by Abu Hanifa that any crop whatsoever which is grown for profit is zakatable at the prescribed rate for produce on harvesting.  This is supported by the generality implied in Qur’anic texts such as “from what the earth produces for you” and “pay their due on the day of their harvest” after mention of a variety of trees and fruits.  It is also supported by the generality implied in the hadith “from that which is fed by the skies, one tenth is obligatory.  From that watered by irrigation one-twentieth” which did not separate food from other produce.

The view of Abu Hanifa is shared by Umar ibn Abdel-Aziz, Hammad, Daud az-Zahiri and Ibrahim an-Nakha’i.  It is considered strongest by al-Tabari.  Most important for our scholars, it was strongly supported and defended by the Maliki jurist Ibn al-Arabi both in his tafsir, Ahkam al-Qur’an and his commentary on the sunan of Tirmidhi.  It is therefore important when we speak of Malikiyya to recognize the plurality of views even within the mazhab.

The second question has to do with whether or not money can be paid as zakat instead of produce or livestock or trading goods owned by the farmer, rearer or trader, respectively.  There are at least seven different views on this, the strongest again being that of the Hanafis, supported by the actions of some companions, which is that this is permissible if the payer so prefers.  In addition to the sound arguments proffered, the sheer logistical advantage of this view commends it.  Just imagine the Government of Kano State herding cattle, goats, rams and camels from the countryside and moving bags of corn, millet etc. to the city for distribution.  Imagine the cost of this process which comes from the zakat fund.  Imagine also all those animals eating up the crops meant for the poor before distribution is complete.   Now compare this situation with one in which the payers give cash or cheques paid into an account for distribution, preserving the value of the fund completely and providing flexibility to the recipients.  The poor man can spend the money on what he needs, rather than what he is given.  This is the second area that our scholars need to look at, in my opinion, and adopt the Hanafi view.

B.  New Questions, New Times

This section deals with zakat on corporate assets. I commend to you all a small book, A-Z manual on zakat, published by Ahmed Zakari & Co and distributed free-of-charge some months ago. It covers business organisations in Islam and identifies zakatable corporate assets. In what follows, I will try to summarize their position on a few contemporary issues and also indicate areas I feel need a second look.

1.  For shares in quoted companies, these are treated as short-term investments in trading goods, since there is a ready market for them. Zakat is payable at the rate of trading goods (2.5%) based on the market value of the shares on zakat due date.

2.  For unquoted companies, zakat is paid on the payer’s share of the company’s Net Assets (i.e. Total Assets minus Total Liabilities). The assets are to be valued at their net realizable value, not cost or Net Book value (i.e. Cost minus Depreciation for Fixed Assets). The rate is 2.5% of the stockholder’s proportionate share of Net Assets.

When all shareholders in a company or partnership are muslims and none of them is worth less than the nisab for zakat, the company can pay zakat on their behalf in accordance with the ruling of the Maliki School of Thought.

3.  The writers also discussed Debtors (Receivables) as a component of Net Assets and concluded that no zakat is due on debtors until payment is received. On this they relied on the position of  Sa’id Ibn al-Musayyib and also that of Aisha and ‘Ikrimah. They preferred these positions to that taken by Uthman, Ibn-Umar and Jabir that debt is similar to deposits and zakat is payable whether or not it is received.

My own view is that the first case applies when there is doubt about collectibility of debt. High quality receivables however, are as good as cash or deposits and zakat should be paid on them. Where there is reasonable basis for not being certain, then, no zakat should be taken until collection.


It is my hope that I have sufficiently covered the ground I was expected to cover in this lecture although a lot has been left unsaid.

Let me acknowledge my great debt to two books of inestimable value as far as contemporary issues on zakat are concerned: Dr. Yusuf al- Qarddhawi’s book, Fiqh uz-zakat and the pamphlet, A-Z manual on zakat published by Ahmed Zakari & Co., a firm of Chartered Accountants based in Kano.

May Allah Guide to the straight path.

Ramadhan Kareem.

Assalamu Alaikum wa Rahmatullah wa Barakau.

Published in: on June 11, 2014 at 02:54  Leave a Comment  
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