Zakah of al Fitr : legitimacy of paying Zakah al-Fitr in-kind and not in cash

Fatawa Question

Many Islamic scholars have legitimized the payment of Zakah Al-Fitr in cash in order to lessen the difficulties that Zakah recipients face with in-kind payments. However, I tend to disagree with this approach in both the Shari’ah as well as the traditional economics grounds. Moreover, instead of only considering the benefit gains of the Zakah Al Fitr recipients, scholars should also pay attention to the consequences of such approach to the general population. On the Shari’ah grounds, it has never been reported that the Holy Prophet (PBUH) or his companions ever paid Zakah Fitr in cash even though dirhams and dinars were widely used as currencies at that time in Arabia. Furthermore, except Imam Abu Hanifa, the three other Imams or 'Jamhurul Ulama' are of the view that in-kind payment is the only legitimate form to pay Zakah Al-Fitr. Therefore, the Shari’ah is heavily in favor of paying this Zakah in-kind and not in cash. On the traditional economics grounds, payment of Zakah Al Fitr in cash creates inflation in the economy. This is how it works: when someone pays Zakah Al Fitr in cash, the recipients have now cash in their hand which was not available to them before. This cash is then used for spending on goods and services. What you have then is inflation----so many dollars chasing few goods. This new spending in the economy increases inflation level and thereby decreases the purchasing power of the rest of the population. Therefore, while helping the poor recipients of Zakah Al Fitr, this approach creates problem for the majority of the population. Therefore, the question is whose interest---the recipients' or the public's----should supersede over the other ? In the Shari’ah principle of the common good 'Maslahatu Aam', the interest of the majority (the general population) more than overweighs that of the minority (the recipients of Zakah Al Fitr). An economic model postulating the above economic explanations was put forward by Ann Katsionis of the University of Toronto, Canada. In her book 'Modern Microenomics', Anna Kitsionis compared the benefit pensioners gain from cash payments against that of food coupon payments. The model proves that pensioners are better off with cash payments. The model, however, shows that since this approach is inflationary, the general population gets worse off. Furthermore, this economic model clearly shows the miracles of the Islamic Economic System. Even though, there was no concept of inflation in the 7th and 8th centuries, what the Prophet (May Peace Be upon Him) and his Companions were indeed doing was to help the poor with in-kind Zakah Al Fitr while protecting the general welfare of the rest of the population by pre-empting the effects of inflation. How the Prophet (P.B.U.H) who was illiterate 'Umi' could come up with such sophisticated economic policy ? As Allah said in the Quran "He does not speak of his own. It is only revelations revealed" (Quran 53, 34). But this is not the only place where Islamic economics is vindicated. Many western researchers are finding evidence supporting the basic Islamic economic principles. Although beyond the scope of this article, Elizabeth warner of Harvard University wrote a book titled 'The Two-Income Trap : Why Middle-Class Mothers and fathers are going broke"" with empirical evidences showing how two transactions prohibited by Islam namely home mortgage (based-on Riba) and health insurance (based on Bay'a Al Qarar) are destroying the lives of middle class American families. Coming back to our Zakah Al Fitr, so far the Shari’ah scholars who favor payment of Zakah Al Fitr in cash are basing their arguments on the benefits the recipients of Zakah Fitr gain from cash payments. These scholars, however, have to broaden their perspective in order to include in the discussion the implications of such policies for the general populations. Abdullahi H. Daud obtained his bachelor's degree in Economics with emphasis in Islamic economics and Master's in business administration from International Islamic University, Islamabad, Pakistan. He is currently pursuing a graduate degree in Information Management at College of Management, Metropolitan States University, Minnesota, USA. He can be reached at daudab@go.metrostate.edu

Fatwa

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Publication Date

2006-11-08

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

3

Data Type

Fatawa

Language

English

Record ID

BIM-792392

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