ZAKAH

By Imam, Sheikh Dr AbdulKadir Al-Salman

First Sermon

Opening Praise and Testimony

Praise be to Allah, Lord of the Worlds. Praise be to Allah, the Giver to those who seek refuge and cleave to His bounty. Praise be to Allah, the Punisher of those who turn away and disregard His door. He has bestowed His bounty upon His servants and His favourites, making Zakah a pillar of His religion through His divine address, and linking it with prayer in His clear revelation and Book. He rewards those who give it and grants them glad tidings of a lighter reckoning, and warns and admonishes those who withhold it with His painful punishment. We extol Him, the Exalted, with the praise due to a servant whom his Master has guided to obedience and abstention from His prohibitions. We thank Him, and our gratitude to Him is due night and day, in all its forms. We bear witness that there is no god but Allah alone, without partner, a testimony that shelters from His punishment. And we bear witness that our master and Prophet Muhammad is His servant and messenger. May Allah’s peace and blessings be upon him, his family, and his companions.

Seasonal Blessings and Ramadan

O servants of Allah, I greet you on the occasion of this blessed month. May Allah help us to complete its fasting and prayers, and may He render it a month of victory and empowerment, and of increased glory for Islam and the Muslims.

Context and Purpose of the Sermon

Servants of Allah, in response to the request of our esteemed brothers, and in fulfilment of their appeal directed to this National Mosque months ago to dedicate a sermon explaining to the general public the rulings on Zakah, its related matters, and contemporary issues, we deliberately delayed the reply to coincide with a time when the wealthy are accustomed to paying Zakah, namely the month of Ramadan.

Zakat as an Islamic, Economic, and Social Issue

Servants of Allah, there is no doubt that Zakah is an Islamic, economic, and social issue. It is Islamic because Islam has prescribed it, economic because it resolves an economic problem, and social because it elevates society to the highest level. This, O Servants of Allah, is nothing less than a miracle of this upright religion, and that this religion is not merely a religion but also a political and social order.

Obligation and Necessity

Servants of Allah, Zakah is a well-established and universally agreed obligation, and it is known of the faith by necessity. Whoever denies what is known by necessity, or rejects it, is an unbeliever. Whoever denies Zakah and its obligation is an unbeliever and has left the fold of Islam. Whoever refuses to pay it without denying or rejecting it is a sinner, and the ruler may compel him to pay it.

Benefits of Paying Zakah

O Servants of Allah, Zakah brings benefits to the one who gives it, including the descent of blessings, the attainment of purity, and the growth of the wealth given as Zakah. The religion of Islam, and whoever refuses to pay it without denying or rejecting it, is a transgressor, and the ruler compels him to pay it.

Blessings for the Payer and the Purification of Society

O Muslims, Zakah brings benefits to the payer, such as blessings descending, the realisation of purity, and the growth of the wealth from which Zakah is taken. The reason for its purity is the cleansing of the hearts of the poor and needy from hatred towards the rich and their envy of God’s bounty. Finally, it also purifies society from the maladies of poverty, the hoarding of wealth, the spread of classism, and the widening gulf between rich and poor.

A Call to the Wealthy

O the wealthy and prosperous people of the state, if you were to distinguish between Zakah and Sadaqah and pay the Zakah upon your wealth as you are commanded, there would be no poor left in Nigeria. Yet, according to statistics, 95% of you give Sadaqah without Zakah.

Zakah Is a Right, Not a Gift

O Servants of Allah, Zakah is not a donation that a rich person bestows upon a poor person or an elder upon a younger one. Rather, it is a defined right within the wealth of the rich. “And in their wealth is a right for the needy and the deprived.” Qur’an

Attention to Jurisprudence

O servants of Allah, whoever God has endowed with any of the four original categories of Zakah must attend to its jurisprudence and seek clarification where unclear, in addition to what has recently been issued regarding new issues of Zakah from the jurists and the scientific jurisprudential councils, so that one may gain complete insight into what is obligatory upon him in the matter of his faith.

The Four Original Categories of Zakah (Overview)

O the believers and Servants of Allah, the four original categories of Zakah are:

(a) Zakah on crops, which includes crops, grains, and fruits such as wheat, barley, raisins, dates, and everything that shares with them the characteristics of being measured, used for food, and stored. The Nisaab for Zakah on crops of all types is approximately 612–675. The amount subject to Zakah is one-tenth if irrigated without cost, such as by rain or rivers; one-fifth if irrigated at cost; and three-quarters of one-tenth (7.5%) if irrigated at one time and without cost at another. However, the passing of a year is not a condition for paying Zakah on crops, due to the Almighty’s statement: “And give its due on the day of its harvest” (Qur’an 6:14).

(b) Livestock, with three conditions: (1) Grazing on God’s land for most of the year; (2) that a full year has passed over it; (3) that it reaches the Nisaab specified by Islamic law for each type and category. Camels have a Nisaab, cattle have a Nisaab, and sheep have a Nisaab. The precise amounts should be referred to scholars to avoid length.

(c) Zakah on gold and silver, including monetary assets such as dinars, dollars, and other currencies. For gold, its Nisaab varies with purity: 24‑karat gold 85 grams; 21‑karat gold 97.14 grams; 18‑karat gold 113.33 grams, and so on. For silver, the minimum is 600 grams of 999.9 purity. The Nisaab due is 2.5% if the amounts reach the Nisaab and a year has passed, or their value divided into forty parts with one part given as Zakah. This division into forty (or 2.5%) is carried out in our local currency (Naira) if the minimum is reached. The minimum today, subject to change, is 18,873,636 million, and the zakat on it is 471,840.9. This is in accordance with the Maliki school of thought, which is prevailing among us. The same applies to Zakah on minerals. A mineral is anything God has created on earth that has value (oil, sulfur, rubies). Likewise, gold and silver (raw silver) are subject to Zakah if they reach the Nisaab or their value. The Zakah due is 2.5%. It has been said that only one-fifth is due on liquid or solid forms on the day of acquisition, and a full year is not required.

(d) Diamonds, pearls, emeralds, and other precious stones have no Zakah if for adornment; if for trade, Zakah is due. They are valued like merchandise at year-end, and Zakah is paid at 2.5%.

Zakah on Merchandise

Servants of Allah, the last type of original zakat category is Zakah on merchandise. Merchandise is everything a person prepares for sale with the intention of profit through trade, such as land and real estate bought or built for sale, goods, clothing, car parts, and the like. All these goods are valued at the end of each Hijri year, and 2.5% of their value is given as Zakah, provided that their value at the end of the year reaches the Nisaab. This is based on authentic evidence for the obligation of Zakah on merchandise. Zakah is not due on the shops or stores themselves, but only on the goods offered for sale; the building of the shop or store itself is not subject to Zakah if not intended for sale.

Second Sermon

Zakah on New and Emerging Matters

O Servants of Allah, among the most important issues of Zakah is the Zakah on new and emerging matters, including the Zakah on shares of companies such as textile or electricity companies, oil factories, banks, or industrial concerns. Zakah on these shares must be paid based on their current actual value at the end of the year, not on the value when purchased. For example, if a man bought a share for 50 naira in Ramadan last year, and in Ramadan this year the share rose to 120 naira—and let us suppose he bought one million shares—he multiplies the current actual value, which is 120 naira per share, by the one million shares he owns. Thus his total becomes 120 million. He pays Zakah on this at 2.5%, or he divides it into 40 parts and pays one part of the Zakah, which is 3 million. This is how to pay Zakah on shares. He may pay it himself, or the company may pay it on his behalf if it is an Islamic company.

Factories, Real Estate, and Current Assets

Among them, O servants of Allah, is the Zakah on factories. Factories are regarded as fixed assets (buildings, machinery, equipment). Real estate intended for rent, not for sale or residence, is included in this category because it constitutes a source of income. There is no Zakah on these things. However, current assets and income from real estate, such as cash, raw materials, and goods ready for sale, are subject to Zakah if they reach the Nisaab by valuing them at a rate of 2.5%. Similarly, profits become zakatable wealth upon reaching the Nisaab and after a year has passed.

End-of-Service Bonuses and Other Items

Included here are points regarding end-of-service bonuses for retirees. The cost of this is difficult to bear, and the entire bonus is subject to Zakah. Raw materials, prayer beads, ready for sale, Zakah is due on them if they reach the Nisaab, assessed at a rate of 2.5%. Similarly, profits become zakatable wealth upon reaching the Nisaab and a full lunar year has passed. This includes Zakah on end-of-service bonuses for retirees. Zakah is due on these bonuses if the total bonus reaches the Nisaab and a full lunar year has passed, at a rate of 2.5%. Alternatively, if the bonus has not been spent for a full lunar year and the Nisaab has not passed, Zakah is added to the retiree’s other assets of the same type, and 2.5% is paid.

Salaries, Leases, and Debts

Among them, O the believers, is the Zakah on large monthly salaries. Scholars and jurisprudential councils have differing opinions on this. One view holds that a person should pay Zakah on the first salary payment if it reaches the Nisaab as an advance payment. Another view holds that the salary should be added to one’s other assets and Zakah paid when a year has passed and the Nisaab is reached, if the salary is not spent before the second month arrives. If the opposite is true, then no Zakah is due because a year has not yet passed. Another example is the Zakah on lease-to-own contracts. This contract is considered forbidden by some scholars because it includes two sales in one contract. Others treat it like any other investment, and therefore pay Zakah on its income at a rate of 2.5% when a year has passed. Another example is the Zakah on bonds. The principal of the bonds is subject to Zakah on the debt expected to be repaid, which is 2.5%. The same applies to all debts that are certain to be recovered.

Recipients and Prohibitions

O servants of Allah, it is most likely impermissible to give Zakah to non-Muslims from among the eight well-known categories. It is also most likely impermissible to give it from a descendant to an ancestor, however high the degree, or from an ancestor to a descendant, however low the degree, except for collateral relatives such as siblings, etc., if they are poor. And it is most likely impermissible for a husband to give it to his wife, or for a wife to give it to her husband. It should be noted that all four categories of Zakah recipients, as we have mentioned, in addition to unforeseen circumstances, may be paid in advance before the year is complete if necessity or a valid interest dictates it. O servants of Allah, these are the rulings on Zakah in Islam, summarised. Blessed is he who obeys the commands of his Lord and fulfils his obligations, especially as we approach the last third of the blessed month. So do not be negligent in paying your Zakah, whether it is financial or Zakat al‑fitr, and your Lord has warned you against that: “And those who hoard silver and do not spend it in the way of Allah — give them tidings of a painful punishment. The Day it will be heated in the fire of Hell and their foreheads, their sides, and their backs will be branded with it. [It will be said], ‘This is what you hoarded for yourselves, so taste what you used to hoard’.”

A sermon delivered by  Imam, Sheikh Dr AbdulKadir Al-Salman, the Ubandoma of Ilorin Emirate, Imam and Khatib of the National Mosque of Nigeria, Abuja