How should we pay Zakat?
By Faisal Amjad

Can we pay in 'bogus' paper money?

Published in: Wealth
Date: 28 / 07 / 19

The pillar of Zakat has two fundamental preconditions. 1. It must be collected in an organised manner by the Ameer (and he can only be one) of the Muslim community, kept in the bait al maal for not more than a maximum of three days during which time, it must be distributed to the eight categories of people mentioned in the Quran. All of this must be done by the zakat collectors appointed by the One Ameer. 2. It must be collected and distributed in 'ayn (money with intrinsic value). Both these conditions are not fulfilled today and therefore the pillar of zakat has fallen.

Paper money is dayn (debt) not 'ayn. Zakat cannot be paid, collected and distributed in dayn. Paper money is only 0.5% of the total money supply in circulation in the economy today. 99.5% is in electronic digits, meaning what is non-existent is being only reflected on the screen. If paying zakat in paper money is not accepted in the shari'ah then it is needless to speak of money that is electronic digits.

Money today has moved from haram (up until 1944) to Ālat al-Fasād wa al-Dzulm - Instrument of Fasad and Dzulm. It is Haram and it is Dzulm. It is imposed as legal tender upon the population which otherwise never chose this form of money for 5000 years, so it is utterly foolish and uneducated in economics, history and the shari'ah to call it halal based on the wrong usage of 'Urf in the principles of Usūl al-Fiqh.

How then do we pay zakat? We should be paying the equivalent of our wealth (saved in the form of this creature called "the legal tender") in gold and distributing the equivalent of our wealth in gold. However, zakat is a fallen pillar. If we give zakat would it be considered as having fulfilled the obligation while nothing has been done to restore the fallen pillar? 

But on the other hand could we then refrain from giving zakat? These are important questions that we have to answer before giving any ruling on the matter.

My summary of the matter will be to give zakat preferably in gold (that can be easily converted to paper money) otherwise paper money or even electronic digits. Zakat must still be given but it will not be considered as fulfilment of the pillar of zakat while the personal wealth on which zakat is obligatory will insha Allah be purified. The act will free the giver of the zakat from not fulfilling the obligation of zakat upon him as an individual and will be a cause for his wealth to be purified in the form of sadaqah. However, the pillar of zakat remains fallen until the two conditions mentioned above are fulfilled. In order to do that, money must first be correctly defined and that correct shari'ah and halal currency must be established. This is indispensable for a Muslim community. 

Faisal Amjad

About the author

I am a history buff and love all things business!

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