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Monday, 25 August 2008

Zakat offers helping helping hand to poor

Charity and Ramadan go hand in hand

ABU DHABI // Hoarding wealth and withholding charity is a sin so grave that ungenerous societies are punished, worshippers were told on Friday as they were reminded to pay their Zakat, Islam’s equivalent of a charity tax.

“The Prophet explained that one of the consequences of withholding Zakat is that people will be deprived of rain,” said the government-issued sermon.

The reminder comes as the holy month of Ramadan nears – a traditional time for charity.

“God has commanded Zakat from his worshippers and made it one of the pillars of our religion, equivalent to prayer. It is the right of the poor and disenfranchised,” said the sermon, issued by the General Authority of Islamic Affairs and Endowments.

“God has warned us against not taking it seriously and not upholding it with integrity, as it has many benefits for the individual and society.

“Zakat purifies from miserliness and stinginess the souls of those who do it and makes them accustomed to generosity and giving.”

Zakat, the third of five pillars of Islam, is akin to a charity tax that is the duty of any Muslim – individuals or businesses – who can afford it.

Some scholars refer to it as an underlying socialist element of Islam, a dynamic that prevents the disparity between rich and poor becoming too large.

The UAE has a Zakat Fund that collects voluntary payments sent by Muslims every year and identifies families in need of financial help.

This week it announced that 250 Emirati families, mainly retired military and families with special needs, had qualified for full financial support for one year, at a total cost of Dh6 million (US$1.63m).

Next year, a new law will require businesses that market themselves as Islamic, such as banks and insurance companies, to submit audited statements and pay an annual Zakat to the fund.

Most Islamic businesses currently distribute their own Zakat directly to the poor and charities of their choosing.

For a Muslim to be liable to Zakat, he or she must have had a minimum amount of wealth for at least one year, equivalent to the value of 85g of gold (approximately Dh8,260, or US$2,250) or 560g of silver. Zakat is then calculated as 2.5 per cent of annual net assets.

Charity and Ramadan go hand in hand and in many Muslim countries the wealthy join businesses, charities and the government in providing free iftar meals every day for the poor to break their fast.

The UAE’s Red Crescent Authority (RCA) yesterday said preparations for charity work during Ramadan are underway nationwide.

“This coming Ramadan season will see extensive charity programmes by the RCA at home as well as overseas”, said the charity’s secretary general, Saleh Musa al Tayee.

Ramadan iftar tents are being put up at 75 locations in the country, offering 67,8000 iftar meals.

In Abu Dhabi, 13 locations will offer 117,000 iftar meals, while in Al Ain, eight locations will offer 72,000 meals. In Dubai, three locations will provide 30,000 meals.
In 50 countries overseas, the charity’s iftar programmes will offer meals to 50,000 Muslims.

There is a tradition of hosting such meals in tents that are visible to people going about their business. No questions are asked and there is a sense of community as people join the feast.

Even mosques in many Western countries continue this tradition. One of Manhattan’s mosques sponsors free iftar meals daily in outdoor tents on its premises. Pedestrians lured by the aroma of food join in the feast, which includes curries, biryani rice, salads and appetisers. Many

restaurants take this as an opportunity to pay their own Zakat.

The fatwa centre that belongs to the General Authority of Islamic Affairs and Endowments in the Emirates regularly receives queries from devout Muslims concerned about whether or not they have fulfilled their duty of Zakat.

“I am an employee with a monthly salary of Dh15,700 and I have Dh140,000 in debt. So how much Zakat do I have to pay? And does the Dh300 monthly stipend I pay to my sister... count as charity?” asked one man.

The mufti explained that the duty to pay off personal debt overrode the duty to pay Zakat, so that the amount of money on which this man would be required to pay Zakat was the remainder of his income after he had paid off his entire debt. The monthly stipend to his sister is charity and encouraged, but not a requirement.

There are more complex questions from people with modern financial assets, such as equities: “I owned stock in the telecommunications company du and I sold them all. Do I owe Zakat on this transaction?

“And do I calculate Zakat based on the initial purchase price or the sale price or the current market price?”

The mufti explained that if the man purchased these stocks with the intention of selling them for profit, then he owed Zakat. The amount owed would be Dh2.5 for each Dh100 at the time of sale, but only if he had owned the stocks for at least one year.

(Source The National/by Rasha Elass)
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Alfalah Consulting - KL: www.alfalahconsulting.com 
Islamic finance consultant: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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