Income Tax: a Substitute for zakaat?
Having known what the Income Tax and Zakaat are, the question that thus arises is that can one (of them) be substituted for the other. It is undisputable that income tax and Zakaat share some similarities. For instance, just as income tax, Zakaat is kept in an Islamic state in the state treasury, in a separate account just like Income Tax. However, there are some important conceptual differences between Zakaat and Income Tax. Primarily, Zakaat is an ibadah (an act of worship); the third pillar of Islam after testifying that there is no god but Allah and Muhammad (SAW) is His Messenger. It is a form of offering which Allah has made obligatory on human beings to express gratitude to him and seek his pleasure. Income Tax is different; it is a social responsibility. It doesn’t have anything to do with spirituality. Thus, while Zakaat is essentially between Allah and his servants, income tax is between citizens and the government.
Moreover, Zakaat is based on Nisab. Any wealth below a certain limit is exempted from Zakaat. The case is different with Income Tax. Though exemption is also applicable to Income Tax, it is only when and where the government or tax authorities explicitly prescribe. Zakaat is also a divine, permanent and regular system that cannot be changed by anybody. Whereas, income tax is not static; it undergoes changes from time to time.
In addition, there is a difference in the objective of both Income Tax and Zakaat. Zakaat is meant to make wealth pure and cleanse the heart of human beings from greed, hatred, and self-centeredness. The objective of Zakaat is, therefore, spiritual and economic. The objective of tax, however, is essentially socio-economic. It has nothing to do with religion.
In term of the beneficiary, Zakaat is specifically meant for certain people (check the first article) while income tax is meant to execute social and governmental duties.
Having highlighted some differences and similarities between Zakaat and Income Tax, it is evidently erroneous to opine that the payment of one is a substitute for the other. Talking about Income Tax in an Islamic state, Dr Yusuf Al-Qaradawi in his work Fiqh-uz-zakaat (Law of Zakaat) explains that jurists have agreed that in the case of genuine need for Muslims, a tax can be imposed even after Zakaat. For example, if there is a great need for financial resources to run administration, provide infrastructures, acquire resources to carry out jihad, and so on, there may arise the need to impose a tax because they are issues that are not essentially under the expected service of Zakaat.
Al-Qaradawi mentions further that pieces of evidence against taxes beyond Zakaat from the Hadith are either weak or unclear, whereas the evidence in support of dues other than Zakaat from the Quran and Sunnah are very strong. Besides, in a country like Nigeria where the government is not an Islamic one, it will be incorrect for a Nigerian Muslim not to pay Zakaat with the evidence that he has paid tax or refuse to pay tax on the ground that he has paid Zakaat. The better explanation here is that a Nigerian Muslim should know that when he pays the tax he fulfils his social obligation and when he pays Zakaat he fulfils his spiritual obligation.
Does the payment of zakaat eliminate sadaqah?
With the explanation given on the nature and objectives of Sadaqah and Zakaat, it is evident that Zakaat does not replace Sadaqah. Zakaat is compulsory on a certain set of people to be given to a specified group of people. It has specified measure and period. Sadaaqah, however, does not have specific measure or quantity neither is it compulsory. Every halal thing can be given as sadaqah by anybody at any particular period.
Having discussed Sadaqah, Zakaat, and Income Tax, it is established clearly that though Zakaat, Sadaqah and Income Tax are all forms of financial duties, they have differences. Sadaaqah is not compulsory and does not have strict rules guiding its implementation, Zakaat has strict rules guiding its implementation and it is compulsory on a certain set of people.
Also, while Zakaat is basically a spiritual obligation, income tax is a social obligation. While Zakaat is permanent (because the rulings on it have been inscribed in the Holy Quran that cannot be modified or revised by anybody), Income Tax changes as government policies change and constitution gets amended.
Finally, as it has been substantiated by the words of Dr Yusuf Al-Qaradawi, there are some functions that may necessitate the imposition of tax beyond Zakaat even in Islamic states and so a Zakaat payer is not necessarily exempted from the payment of Income Tax, vice versa. And also in a non-Islamic state like Nigeria, it is instructive to know that Zakaat is an obligation to Almighty Allah while a tax is an obligation to the state authority—and this authority Allah has also enjoined us to follow provided they do not instruct us to disobey Him (Allah). In Qur’an chapter 4:59, Allah says: “O ye who have believed, obey Allah and obey His Messenger and the people of authority amongst you. And if you disagree over anything, return the matter to Allah and His Messenger (Muhammad, SAW) if you truly believe in Allah and the Last Day. That is the best [way] and best in result.”