The Fatwas On Zakah

The Fatwas by the Islamic Jurisprudence Academy in Jeddah

Zakah on debts (Decree No. 1 Session 2)

After the Academy surveyed the different studies submitted about "Zakah on Debts" and after detailed discussion on the subject, the following has been decided:

There is no Qur'anic verse or a Prophet's Hadith regarding the subject. The Companions and their followers hold different points of view on how to give Zakah on debts. Therefore, Juristic Schools hold different opinions on the same subject. These different opinions are based on the controversial point whether Zakah is due on money expected to be settled or not. There are two viewpoints in this regard:

First: Zakah is due on the lender annually if the borrower is rich and can settle his debts.

Second: Zakah is due on the lender following the lapse of a year after he receives the debt if the borrower is insolvent or used to procrastinate.

2. Zakah on buildings and non-arable leased land (Decree No. 2 Session: 2)

After the Academy surveyed the different studies submitted about "Zakah on buildings and non-arable leased land" and after detailed discussion on the subject, the following has been decided:

There is no Qur'anic verse or a Prophet's Hadith which points that Zakah is due on buildings and non-arable leased land. There is no Qur'anic verse or a Prophet's Hadith which points that Zakah is immediately due on the revenues of buildings and non-arable leased land. Therefore, the Academy decides the following:

First: Zakah is not due on the value of buildings and non-arable leased land.

Second: Zakah is due on their revenues following the lapse of a year after receipt. The rest of Zakah payment conditions should be taken into consideration.

Zakah on company shares (Decree No. 3 Session: 3)

On perusing research written about Zakah on company shares, the Council of the Academy decided the following:

First: Zakah is obligatory on company shares. The company should pay Zakah on behalf of the shareholders if the company bylaws so stipulate; if its general assembly issued a decree to this effect, the company is legally obliged to pay Zakah or if the shareholder authorized the company to pay such Zakah.

Second: The company administration should pay Zakah on shares just like an individual person pays Zakah on his own money. This means that the company will consider the money of all shareholders as the money possessed by a single person. Zakah will be paid accordingly, taking into consideration the criteria of Zakah payment such as the allotted Nisab, the amount to be paid, type of funds as well as any other conditions related to the payment of Zakah. The shares on which Zakah is not due are public treasury shares, charitable endowment shares, charitable authority shares and non-Muslim-owned shares.

Third: If the company did not pay Zakah for one reason or another, the shareholder must pay Zakah on his held shares. If he managed to examine the accounts of the company and know the amount of Zakah due on his shares, supposing that the company would pay Zakah in the same manner mentioned above, he would have to pay Zakah on this basis. If he does not have knowledge of the company accounts and is a shareholder of the company with the aim of making use of the annual revenue from the shares, he will pay Zakah on his shares as if they were invested items. According to the decree of the Islamic Jurisprudence Academy in its second session regarding Zakah on buildings and non-arable leased land, the shareholder will pay Zakah on the revenues of his shares and not on the value of the shares themselves. The amount payable is a quarter of the tithe after the lapse of a year in which the shareholder receives revenue from his shares. If the shareholder purchases such shares with the purpose of entering into commercial transactions, he would pay Zakah on them as if they were commercial goods. If a year lapsed with such shares in his possession, he would pay Zakah on their market value. If he can not ascertain the market value, he will pay Zakah on the value of the shares as estimated by experienced people. He has to pay a quarter of the tithe of their value as well as on the profit, if these shares made a profit.

Fourth: If a shareholder sold his shares during the year, he would add their sale price to his money and pay Zakah on both when a year lapses. The buyer will pay Zakah on the shares in the same manner mentioned above.

þ4. Channels of Distributing Zakah

Investing Zakah money in profitable projects:

On perusing the researches submitted on "Investing Zakah money in profitable projects while the deserving person does not possess them" and listening to the opinions of experts and members, the following has been decided:

It is permissible to invest Zakah money in profitable projects possessed by Zakah deserving recipients. These projects may be supervised by the legal authority in charge of levying and distributing Zakah, provided that the dire needs of Zakah recipients are fulfilled and there are sufficient guarantees that there will be no losses.

5- Channels of Distributing Zakah

Giving Zakah to the Islamic Solidarity Fund

After perusing the memo submitted to the third session of the Academy regarding giving Zakah to the Islamic Solidarity Fund, the following points are recommended:

According to the Resolutions issued by the Second Islamic Summit Conference which call for establishing this Fund and financing it by the state members, and as long as some countries did not pay their regular voluntary annuity, and as a means of helping the Islamic Solidarity Fund to perform its charitable aim, the Academy calls the Islamic countries and organizations and well-to-do Muslims to support this Fund so that it may assume its role in helping the Islamic nation.

The following has been decided:

First: It is not permissible to give Zakah to the Islamic Solidarity Fund because this will prevent the original recipients mentioned in the Glorious Qur'an from obtaining their right.

Second: The Islamic Solidarity Fund could be an agent for individuals and organizations in giving out Zakah according to the following conditions:

The conditions of legal authorization should be met whether by the Fund, individuals or organizations. The Fund should modify its bylaws by adding the amendments which will enable it to carry out such tasks. The Islamic Fund should allocate a special account for Zakah money so that it will not be mixed with resources spent in other non-Zakah channels such as public conveniences. The Fund is not allowed to spend Zakah money on administrative fees and employees' salaries which do not belong to Zakah channels. Those who pay Zakah have the right to determine any of the eight channels for giving out their Zakah money and the Fund should stick to their choice. The Fund should distribute Zakah money to its recipients as soon as possible within a year as a maximum.

Decrees issued by the Islamic Jurisprudence Academy in Mecca (Islamic World League)

First Decree - Eleventh Session

Zakah on the rent of buildings.

In its eleventh session held in Mecca, the Islamic Jurisprudence Academy of the Islamic World League discussed Zakah on the rent of buildings and the majority of its members decided the following:

No Zakah is due either on the value of the building prepared for accommodation or on its rent. Zakah is due on the value of the building bought for trade purposes and its value is to be evaluated one year after buying it. Zakah is due on the rent of buildings prepared for rent only. Zakah on rent should be given one year after the lessor receives the rent. Zakah due either on the rent of building or on the building itself (if bought for trade purposes) is 2.5%.

Fourth Decree - Eighth Session

Levying and Distributing Zakah in Pakistan

In its eighth session held in Mecca, the Islamic Jurisprudence Academy discussed the question directed by the Pakistani Embassy in Jeddah regarding the distribution of Zakah. The question deals with the channels of Zakah and whether the meaning of the Qur'anic phrase "in the way of Allah" refers only to Mujahidin or all sorts of charitable deeds such as public facilities, building mosques and bridges, spreading religious teachings and preparing missionaries.

After studying the subject, it appeared that there are two interpretations of the phrase:

Most scholars hold that "in the way of Allah" refers to Mujahidin only. Some other scholars regard this as reference to all charitable deeds such as building mosques, roads, bridges and schools, preparing ammunition and spreading religious teachings by helping missionaries as well as any other public interests which may be of benefit to Muslims.

After discussing the opinions held by both parties, the Academy decided the following:

The second opinion is held by a number of Muslim scholars and it refers to other Qur'anic verses such as: "Those who spend their substance in the cause of Allah, and follow not up their gifts with reminders of their generosity or with injury, for them their reward is with their Lord; on them shall be no fear, nor shall they grieve." It also refers to a Hadith narrated by Abu Dawud. A Companion allocated a she-camel for riding during battles (in the way of Allah). When his wife wanted to perform Hajj, the Messenger of Allah (peace be upon him) said to her: Use it in riding, for Hajj is also in the way of Allah. As long as the purpose of jihad is spreading Islam, preparing missionaries and spreading religious teachings are also a means for spreading Islam and hence a sort of jihad. The Messenger of Allah (peace be upon him) said: Fight the polytheists with your money, souls and tongues. As long as atheists, Jews and Christians wage war against Islam and they are supported by money, the Muslims must face them by using their very same weapons. As long as jihad in Islamic countries has its ministry if compared with the missionary call which is not supported by money or ministries, the Academy decides - in absolute majority - that "in the way of Allah" includes missionary call and all its complementary deeds.

The Fatwas delivered by the First Zakah Conference (held in Kuwait Rajab 29, 1404 A.H. / April 3, 1984 A.D.)

Zakah on the companies capital

Zakah is due on joint stock companies in the following cases:

If a law is passed and it obliges the companies to give Zakah. If the main system of the company includes an article which stipulates giving Zakah on its capital. If the general assembly of the company issues a decree in this regard. If the share-holders agree that the company should give Zakah on their behalf.

It is rather better for the company to give Zakah on its capital. If it does not pay, the committee recommends that the company should calculate the amount of Zakah due on its capital and issue an addendum to its balance sheet which states the amount of Zakah due on each share.

Zakah on shares

If a Company pays Zakah on its shares, a shareholder is not required to pay Zakah on his shares once again. If it does not, the shareholder must pay Zakah as follows.

How to calculate the amount of Zakah due on companies' shares?

If the company pays Zakah, it will calculate its amount as an ordinary person would do. Zakah will be calculated according to the nature and type of possessions. If the company does not pay Zakah, a shareholder must pay Zakah due on his shares by following any of these two methods:

If one buys his shares for trade purposes, Zakah is due at a rate of 2.5% of their market value as followed when calculating Zakah due on commercial goods.

If one buys shares in order to make use of their annual revenues, Zakah is calculated as follows:

If one can know from the company the amount of Zakah due on his shares, Zakah is to be given at a rate of 2.5%. If he cannot know, there are two different opinions:

The majority of scholars hold that the shareholder should add the revenues of his shares to the rest of his possessions and give Zakah at a rate of 2.5% on all his money. Some other scholars hold that he should give 10% of the total revenues after receipt as followed in calculating Zakah on crops and fruits.

Second: Zakah on exploited items

Exploited items refer to factories, buildings, cars and machines intended for rent and not for trade. The Fatwa Committee holds that no Zakah is due on these items, but it is due on their revenues. There are different opinions on how to give Zakah on such revenues. The majority of members hold that these revenues are to be added to the other items possessed by their owners such as money and goods. A rate of 2.5% will be paid as Zakah on them.

On the other hand, some members hold that Zakah is due on the net revenues which exceed the owner's basic needs after deducting costs and rate of consumption. Rate of Zakah will be 10% as followed in calculating Zakah on crops and fruits.

Zakah on wages and salaries

Such money is the revenues of a man's work like workers' wages, employees' salaries and doctors and engineers' remuneration etc. Most members of the conference hold that no Zakah is due on such wages upon receiving them. One should add such wages to his own money and pay Zakah on them all if they reach the allotted Nisab and after they remain in one's possession for a complete year. If he receives any wages during the year, Zakah is to be paid at the end of it. Such year starts from the very day on which one's money has reached the allotted Nisab. In such case, the rate of Zakah is 2.5% annually. Some of the conference members hold that Zakah is to be paid on such wages upon receipt if they reach the allotted Nisab after fulfilling one's basic needs and no debt is entailed on him. If one pays Zakah on his wages upon receipt, he is not obliged to pay it once again upon the completion of a year. It is also permissible to calculate Zakah due on one's wages and give it along with his other kinds of property.

Fourth: Zakah on usurious deposits, securities and ill-gotten money

As for usurious securities and deposits, Zakah is due on their original values with a rate of 2.5%. No Zakah is due on the usurious interests because they are ill-gotten money that a Muslim should avoid. Such money should be spent in charitable channels and for Muslims' public interests except for building mosques or printing Qur'anic texts. As for looted or stolen money, no Zakah is due on it, but it should be returned to its real owner.

Fifth: The lunar calendar

The lunar calendar should be taken into consideration when calculating Zakah money. The Fatwa Committee recommends that individuals, companies and financial institutions should adopt the lunar calendar as a basis for preparing the balance sheet, or at least that they should prepare a special Zakah balance sheet according to the lunar calendar. If there is difficulty in this matter and the balance sheet was prepared according to the solar calendar, the difference between the two calendars should be taken into account. As the solar calendar is little longer than the lunar one, rate of Zakah will be approximately 2.577%.

Sixth: Investment debt and Zakah

If a debtor uses debt in trade purposes, it is not to be calculated as part of money on which Zakah is due. If it is used in buying houses or machines for possession, the committee pays the Jurists' attention that the issue should be carefully studied. That is because there is a legal opinion that debt is a reason for not paying Zakah on its equivalent value. Thus, many people, companies and organizations will not give Zakah under this pretext although they achieve good profits.

The committee holds the opinion adopted by jurists who believe that if the debt is postponed, it is not an excuse for not paying Zakah. Yet, the whole affair needs further study.

The committee recommends that next conferences resume their study of the issues that may arise in this regard which have not been studied by this conference.

Finally, the committee calls for paying attention to the importance of Zakah and its rules in all economic and social applications.

The Fatwas delivered by the Third Conference of the Islamic Bank held in Dubai, Safar 9, 1406 A.H. / September 23, 1985 A.D.

It is not allowed to save Zakah monies in usurious banks. An independent fund should be set up for Zakah monies, where Zakah will be levied and deposited in an Islamic Bank. After levying Zakah, it should immediately be distributed to the beneficiaries. No authority, whether public or private, is allowed to invest Zakah money unless its beneficiaries later allow such authority to invest it.

The Fatwas delivered by the First Symposium of Zakah Contemporary Issues (Held in Cairo Rabi` Al-Awwal 14, 1409 A.H. / October 25, 1988 A.D.)

Fatwas and Recommendations

1. Amount of Zakah due on commercial goods

There is no difference between Zakah due on money and commercial goods as far as Nisab and the amount of Zakah are concerned. This is the opinion held by the majority of scholars. It is not true that this leads to equality in dealing with both the investor and money collector because Zakah is due on both at the very same rate. Investment aims at increasing the capital and hence Zakah can be paid on the revenues while the capital remains untouched.

Whoever does not find an opportunity for investing his money should pay Zakah on the capital. Prophetic Hadiths urged the guardian to invest the orphan's money in trade so that it will not be consumed in giving out Zakah.

Zakah is not due on the investor's money which turns into fixed assets. In most cases, money represents the capital of projects invested for attaining profits.

2. Industrial projects

After perusing the Fatwas delivered by the First Zakah Conference (clause 6), it turned out that industrial projects could be compared to cultivated land from the perspective that both are fixed assets which achieve income as a result of work. Therefore, Zakah is due on the output products at a rate of 5%. It is also possible to consider the permanent working capital (circulating assets) just like commercial goods. Hence, Zakah is due on both the original value as well as the attained profits at a rate of 2.5%. No Zakah is due on the fixed assets.

This subject needs further discussion in the next symposium.

3. Transference of Zakah money to other areas

According to decree No. 5 issued by the Second Conference of Islamic Research Academy, Zakah is a basis for social solidarity in all Islamic countries. The Prophet (peace be upon him) and the Rightly-Guided Caliphs used to distribute Zakah to its recipients in the area where Zakah is originally levied. The surplus is to be taken to other areas except in cases of starvation, disasters and abject poverty. In such cases, Zakah will be distributed to the more needy people. This rule applies either to the individual or the society. It is permissible for a person to distribute Zakah to his needy relatives if they live in another area.

4. Relief from debts due on Zakah recipient

If an insolvent borrower fails to settle up his debts to his lender who later acquitted him from paying them back, such debts will not be regarded as Zakah even if the borrower is a Zakah recipient. This is the opinion held by most scholars.

This rule applies to the following cases as well:

If the lender pays Zakah to the borrower who returns it as settlement of his debts without a prior consent, Zakah is valid. If the lender pays Zakah to the borrower provided that the latter will pay it back instead of his debts or if both agree on this matter, Zakah is not valid. This is the opinion held by the majority of scholars. If the borrower asks his lender to give him Zakah so that he could settle up his debt, and the borrower did so, Zakah is valid. Yet, the borrower is not obliged to pay back the very same amount as settlement of his debt. If the lender said to the borrower: "Settle up your debt and I will give you Zakah." and the borrower did, Zakah is valid and the lender is not obliged to pay back the very same amount (of the debt) to the borrower.

5. Money given as advance Zakah

It is permissible that one should consider money he gives in advance before time of Zakah is due as Zakah if the appropriate conditions are met such as the possession of the allotted Nisab, the person who receives such money should be a Zakah recipient and that Zakah should be due on the person who gives such money. This is the opinion held by all scholars except for the Maliki Jurists. If one of the above-mentioned conditions is not met, money given will be considered as voluntary charity. It is not permissible to get it back after the Zakah recipient receives it unless it is given by the government or a Zakah organization. In such case, it is permissible to get it back after proving that the given money is more than the Zakah due unless it is distributed to its recipients.

6. The obligatory nature of Zakah and the role of governments in Zakah collection and distribution

The Fatwa Committee calls the Islamic governments to work hard towards implementing Shari`ah rules in all fields of life including the foundation of a special organization for collecting Zakah and distributing it to its legal channels provided that such organizations should have a separate balance sheet. In non-Islamic countries, there should be societies which direct their efforts to Zakah collection and distribution. The committee calls the Islamic governments to issue the required legislative decrees so that Zakah organizations will be established and supervised by religious scholars and efficient employees. The committee calls the Islamic governments to add to the taxation laws new clauses which deduct the amount of Zakah regardless of the amount of taxes legally allotted. The committee calls the Islamic governments which apply Zakah rules to impose a social solidarity tax on non-Muslim citizens equal to Zakah. Such tax should be one of the resources of achieving social solidarity which covers all citizens who live in the Islamic country.

7. The Zakah channel : "in the way of Allah"

The Zakah channel "in the way of Allah" refers to jihad in its broad sense including the efforts exerted for spreading Allah's word, implementing the rules of Shari`ah, calling for Islam and defending Islam against its enemies. Therefore, jihad is not restricted to military activity.

Under this broad sense of jihad, the following are included:

Financing the jihad military movements which defend Muslims and protect their land as in Palestine, Afghanistan and the Philippines. Supporting the individual and collective efforts which aim at implementing the rules of Shari`ah and opposing the plans of the Muslims' enemies. Financing Da`wa centers in non-Muslim countries with the aim of spreading Islam by following the appropriate contemporary methods. This applies to every mosque established in a non-Muslim country. Financing the efforts directed to spread religious teachings among the Muslim minorities in non-Muslim countries.

8. Zakah and fulfilling the basic needs of the poor

The term "basic needs" refers to the necessities required for achieving sufficiency and social solidarity according to the prevalent customs. Zakah should provide the poor Muslim with his basic needs such as food, accommodation and clothes as well as the rest of his and his family's requirements without extravagance or parsimony. Distributors of Zakah, whether individuals or organizations, should make investigations on Zakah recipients in a way that does not hurt their feelings to make certain that they are deserving it. It is not required to charge Zakah recipients to swear that they deserve Zakah unless there is doubt that they may be lying.

9. Zakah on housing and postponed investment loans

According to clause 10 issued by the First Zakah Conference regarding Zakah due on investment debts, and according to the opinion adopted in this conference which states that: "If the debt is postponed, it does not affect the obligatory nature of Zakah", the subject still needs further study. In this symposium, the following opinion is adopted:

As for housing loans which finance a fixed asset upon which no Zakah is due and which are settled on long-term installments, their value is to be deducted from the required annual installment if the debtor does not have other money to settle such debts.

As for the loans which finance the circulating working capital, they are to be deducted from the possessions upon which Zakah is due. The subject still needs a further detailed study.

10. Zakah on companies

The symposium discussed two researches submitted about this subject and below are its decrees:

The symposium recommends that the International Zakah Legal Authority in Kuwait should found a committee for discussing Zakah on companies. The members of this committee should include professional accountants, academic specialists in the field of accounting, Jurists and researchers interested in Zakah affairs and Islamic economy. The task allotted to this committee is studying the practical affairs related to calculating the possessions upon which Zakah is due as well as the accounting principles, rules and customs approved in preparing the company's financial data. The committee should submit the appropriate researches to be discussed in the next symposiums. According to clause 9 issued by the First Zakah Conference, the symposium asserts that the lunar calendar is the basis for calculating Zakah, and this point should be taken into consideration when calculating Zakah due on the companies which prepare their financial data according to the solar calendar.

11. Zakah on commercial goods

Zakah on commercial goods should be given in cash after evaluating such goods and calculating the amount of Zakah due on them, because cash money is more useful to the poor who need to fulfill their basic needs. Even though, it is permissible to give goods as Zakah in case of recession or shortage of liquid money. The poor may make use of these goods as well. This is the opinion held by the members of the symposium in the light of Juristic viewpoints and the current circumstances.

Goods are to be evaluated according to their market value on the very day when Zakah is due. The sold goods are evaluated according to their wholesale price whether sold in retail or wholesale.

The Fatwas delivered by the Second Symposium on Zakah Contemporary Issues (Held in Kuwait at Dhul-Qa`dah 11, 1409 A.H. / June 25, 1989 A.D.)

1. Using Zakah in paying blood money (the channel of the debtors)

If a man commits unintentional homicide and his family or the Muslims' Public Treasury fails to settle up blood money due on him, it is permissible to use Zakah money in achieving this purpose. It is also allowed to pay such Zakah money to the family of the murdered person directly. As for blood money in case of intentional homicide, it is not permissible to use Zakah money in settling it up.

2. Zakah on ill-gotten money

After the members of the symposium had discussed the various researches submitted in this regard, they held that a lot of data and much details were still needed. Therefore, the symposium did not deliver any Fatwa until the subject would be discussed in its most accurate details.

3. Zakah on investment and housing debts

According to the tenth recommendation issued by the First Zakah Conference and the ninth recommendation of the First Symposium on Zakah Contemporary Issues which call for deducting the loans which finance the circulating capital while not deducting the housing debts or debts which finance fixed assets except for annual installments, the symposium members are of the following opinion:

All debts which finance a commercial transaction are to be deducted from Zakah possessions if the debtor does not have fixed assets which exceed his basic needs. Investment debts which finance industrial projects are to be deducted from Zakah possessions if the debtor does not have fixed assets which exceed his basic needs so that such assets may replace these debts. If such investment debts are postponed, the required annual installment will be deducted. If there are sufficient fixed assets, they should be considered as replacement of the debts. In such case, debts will not be deducted from Zakah possessions. If the fixed assets are not sufficient so as to replace the whole debt, the remaining part of it is to be deducted from Zakah possessions. As for postponed housing loans which are settled on long-term installments, the debtor is to pay Zakah on the remaining money actually in hand (if it reaches the allotted Nisab) after deducting the annual installment. The channel of "those in bondage"

The Fatwas delivered by the Second Symposium on Zakah Contemporary Issues (Held in Kuwait at Dhul-Qa`dah 11, 1409 A.H. / June 25, 1989 A.D.)

1. Using Zakah in paying blood money (the channel of the debtors)

If a man commits unintentional homicide and his family or the Muslims' Public Treasury fails to settle up blood money due on him, it is permissible to use Zakah money in achieving this purpose. It is also allowed to pay such Zakah money to the family of the murdered person directly. As for blood money in case of intentional homicide, it is not permissible to use Zakah money in settling it up.

2. Zakah on ill-gotten money

After the members of the symposium had discussed the various researches submitted in this regard, they held that a lot of data and details were still needed. Therefore, the symposium did not deliver any Fatwa until the subject would be discussed in detail.

3. Zakah on investment and housing debts

According to the tenth recommendation issued by the First Zakah Conference and the ninth recommendation of the First Symposium on Zakah Contemporary Issues which call for deducting the loans which finance the circulating capital while not deducting the housing debts or debts which finance fixed assets except for annual installments, the symposium members are of the following opinion:

All debts which finance a commercial transaction are to be deducted from Zakah possessions if the debtor does not have fixed assets which exceed his basic needs. Investment debts which finance industrial projects are to be deducted from Zakah possessions if the debtor does not have fixed assets which exceed his basic needs so that such assets may replace these debts. If such investment debts are postponed, the required annual installment will be deducted. If there are sufficient fixed assets, they should be considered as replacement of the debts. In such case, debts will not be deducted from Zakah possessions. If the fixed assets are not sufficient so as to replace the whole debt, the remaining part of it is to be deducted from Zakah possessions. As for postponed housing loans which are settled on long-term installments, the debtor is to pay Zakah on the remaining money actually in hand (if it reaches the allotted Nisab) after deducting the annual installment. The channel of "those in bondage"

As this channel is non-existent at present, its share of Zakah is to be distributed to the rest of Zakah channels.

5. Giving Zakah in other places

The third recommendation of the First Symposium on Zakah Contemporary Issues states that Zakah should be originally paid to its recipients in the territory where it is levied. The surplus is to be transferred to any other territory. As an exception, it is permissible to transfer Zakah to the more needy or to one's relatives who live in another territory. The Symposium hereby sets out the details of Zakah transference as follows:

A. Zakah should be originally distributed to its recipients in the territory where it is levied. It is permissible to transfer Zakah to other territories as a means of achieving a legal target such as:

Transferring Zakah money to the countries where people wage jihad in the way of Allah. Transferring Zakah money to missionary, educational and health establishments which deserve Zakah. Transferring Zakah money to places of starvation and disasters which may afflict the Muslims in any part of the world.

B. If Zakah is transferred in any other case, except for those afore-mentioned, Zakah is valid but the act of transference is disapproved.

C. The territory where Zakah should be distributed is one's town and its neighboring villages not farther than 82 km. (the distance at which a Muslim will shorten his prayer.

D. Zakatul Fitr is to be given where one lives.

E. Acts permissible in case of transferring Zakah money:

Payment of Zakah in advance so that its recipients may obtain it before the end of the year. Zakatul Fitr is not to be given before the advent of Ramadan. Delay in Zakah payment because of the period spent in transference.

The Fatwas delivered by the Third Symposium on Zakah Contemporary Issues (Held in Kuwait at Jumada Al-Akhirah 8, 1413 A.H. / December 2, 1992 A.D.)

First: Investment of Zakah funds

It is permissible to invest Zakah funds according to the following conditions:

If there are no urgent channels which require immediate payment of Zakah money. If Zakah money is invested in a legal manner. Necessary procedures should be taken so as to guarantee that the rules of Zakah still apply to the original invested money as well as to its profits. Liquidating invested assets if Zakah recipients need Zakah in cash. Making sure that such investments will be safe, lucrative and can be liquidated in time of need. The decision of investing Zakah funds should be taken by the government officials charged to levy and distribute Zakah. Such investments should be supervised by efficient experts.

Second: The recipients' possession of Zakah money

This refers to paying a sum of money to the recipients or buying a means of production such as tools used in crafts and giving them to the Zakah recipients who are able to work. Possession, in this sense, is a condition of the validity of Zakah. This rule applies to four categories of Zakah recipients mentioned in the following Qur'anic verse: "Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to the truth)" (9:60) It is permissible to use Zakah money in establishing productive projects to be owned and managed by Zakah recipients or their representatives. It is permissible to use Zakah money in establishing service projects such as building schools, hospitals, orphanages and libraries according to the following conditions:-

Only Zakah recipients should make use of these projects for free. The projects are to be possessed by Zakah recipients and managed by the government or its representatives. If the project is sold or liquidated, its price or revenues are considered as Zakah money.

Third:The channel of those whose hearts have been (recently) reconciled (to the truth)

1. According to the majority of scholars, the rules pertaining to this channel do not change throughout the years.

2. The most important fields of Zakah payment related to this channel are:

Using Zakah money in urging people to embrace Islam especially those who will act effectively towards the welfare of the Muslims. Urging rulers and kings to improve the conditions of the Islamic minorities and support them in non-Muslim countries. Urging talented Islamic intellectuals to support the Muslims' issues. Founding scientific and social establishments to sponsor Muslims who have just recently embraced Islam.

3. The following conditions are to be taken into consideration when dealing with this channel:-

When dealing with this channel, the legal aims and practices should be taken into account so as to achieve the required targets. Giving Zakah according to this channel should not have a bad effect on the remaining channels. Accuracy and caution should be observed in order to avoid any legally unacceptable results, bad reactions from those whose hearts have been (recently) reconciled (to the truth) or any harm to Islam and Muslims.

4. The advanced modern methods are to be used and the more influential projects should be chosen in order to achieve the legally required targets.

The Fatwas delivered by the Fourth Symposium on Zakah Contemporary Issues (Held in Bahrain Shawwal 17, 1414 A.H. / March 29, 1994 A.D.)

First: The channel of those employed to administer Zakah

This refers to the employees appointed or authorized by the Islamic governments or recognized authorities in order to levy and distribute Zakah, spread legal rules pertaining to Zakah, acknowledge money holders with names of Zakah recipients, transfer, maintain and invest Zakah money according to the conditions and restrictions stated in the first recommendation of the Third Symposium on Zakah Contemporary Issues. Modern Zakah organizations and committees are considered as a modern form of the old charity houses known in Islam. Therefore, employees in such organizations should meet the conditions required in whomever is employed to administer Zakah. Such employees are authorized by the government in performing the tasks allotted to them. Scholars stipulate that such employees should be Muslims, males, honest and familiar with the rules pertaining to Zakah. There are other helpful tasks which can be performed by others who do not meet these conditions. Those employees deserve the remuneration determined by the authority which appoints them provided that such remuneration will not be more than their counterparts' even if they were not poor. All employees' remuneration and administrative expenses should not exceed one-eighth (12.5%) of Zakah money. Over-employment is not recommended in this regard. Some or all salaries should be drawn from the Public Treasury so as to direct Zakah money to other channels. Zakah employees are not allowed to accept any bribes or gifts. The headquarters of Zakah organizations should be provided with the required furniture, equipment and tools. If it is not possible to allocate money from Public Treasury or donations for this purpose, it is permissible to make use of the employees' share of Zakah in achieving this purpose, provided that such furniture and equipment should have an immediate relation to levying and distributing Zakah. Zakah committees should be controlled and supervised by the authority which forms them, for the Messenger of Allah (peace be upon him) used to check the accounts of Zakah employees. The Zakah employee is held responsible for any loss of Zakah money resulted from his negligence or misuse. Zakah employees should follow Islamic morals and conduct when dealing with those who give Zakah and its recipients. They should be lenient towards them and invoke blessings on them. They should work hard towards spreading the rules of Zakah, its importance in the Muslim community and its role in achieving social solidarity.

Second: Zakah on ill-gotten money

1. Ill-gotten money refers to any sort of possessions which the Islamic Shari`ah prohibits owning it, either because it is harmful such as wine, illegally acquired such as looted money or illegally gained such as usury and bribe.

If one acquires money illegally, he should return it to its original owner or his inheritors however long period passed with such money already in hand. If one does not manage to know its real owner, he should spend it on charitable deeds on behalf of its owner. If one receives money as remuneration of a prohibited work, he should spend it on charitable deeds but not return it to the payer. Ill-gotten money is not to be returned to its real owner if he insists on illegal transactions such as dealing in usurious interest. Such money is to be spent on charitable deeds. If it is difficult to return the very same money to its real owner, an equivalent sum of money should be returned instead. If its real owner is not known, such sum of money is to be spent on charitable deeds on behalf of its owner.

2. No Zakah is due on ill-gotten money and it should be eliminated.

3. No Zakah is due on illegally acquired money because it is not entirely owned by its present owner. If returned to its real owner, he should pay Zakah on it for one year even if it remained in the possession of another for years.

4. If the holder of ill-gotten money does not return such money to its real owner and pays Zakah on it, he is still sinful as far as he has such money because he has just paid a part of it while the rest is still in his hand. He is not acquitted unless he returns it to its real owner or gives it as charity.

Third: Zakah and Taxes

1. The symposium calls the Islamic governments to issue the required laws for implementing Zakah system according to the Islamic Shari`ah. For achieving this purpose, special organizations should be established and their financial resources and expenditures are to be recorded in special accounts. The symposium also calls for reconsidering nowadays financial systems so as to be re-modeled in conformity with the Shari`ah.

The balance sheet of the state should be financed by the revenues of the public possessions and other legal financial resources. If they are not sufficient, the Government may fairly impose taxes in order to meet its expenditures and submit help to Zakah recipients if Zakah money is not sufficient. It is not allowed to use Zakah money in meeting such expenditures. Taxes may be imposed to achieve the interests of the Muslims which should be determined and estimated in the light of the financial Islamic system and the general rules and targets of Shari`ah. Imposing taxes is permissible only if there is a real need. Taxes should be collected and spent fairly. A specialized, efficient authority should control and supervise their collection and distribution.

Taxes do not replace Zakah because both were imposed by two different authorities and for extremely divergent targets. Besides, the amount and channels of both are entirely different. Therefore, the amounts of taxes are not to be deducted from obligatory Zakah money. If a certain amount of taxes should be paid to the government during the year and it is not paid before the year is complete, it should be deducted from Zakah possession because it is a due right. The symposium recommends that the Islamic governments should modify the taxation laws so as to deduct Zakah money from taxes.

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JazakAllah