The Influence of Both Zakat and Tax on Economic Development

The Influence of Both Zakat and Tax on Economic Development PDF

Fatima Mohammed Abdul Hafith Hassouna

Supervisor(s)

Dr. Hasan Saffarini - الدكتور جمال الكيلاني

Discussion Commity

194 صفحة

Abstract :

Abstract This study discusses the Zakat system as a financing source, in addition to being a kind of prayer. It is the only prayer characterized by having a pure financial quality. Hence, it plays a dual role as a prayer and as a developing factor offered by the Islamic economy to solve the problems from which human societies suffer, as a result of the imbalance of wealth and income distribution, and from the absence of this organized financial and plentiful tool which is unique among secular economies dominating Muslim world. The study also discusses the role tax plays in development. In Addition, it sheds light on this distinguished economic tool that helps in solving the social and economic problems from which we suffer, pending on our correct use of this system according to Shariaa. The study covers the subject in three major chapters. In the first section of the first chapter, I talked about the general concept of Zakat, defining it from the perspective of language and terminology. In the second , I tackled the legality of Zakat from the Shariaa perspective, explaining its significance.In the third , I referred to the terms of Zakat and to the funds to which it applies. In the fourth section, I enumerated the eight fields in which Zakat can be spent, in addition to the attitude held toward the one who bans it. The second chapter of the study comprises of three sections the first of which defines the general framework of taxation that includes : tax concept, justification of its imposition, its characteristics and rules. The second section tackles types and goals of taxes. The third sheds light on taxes in Palestine and the challenges the Palestinian Income Tax Department encounters, with regard to implementing the law of income tax. In the fourth section, a comparison was made between taxes and Zakat highlighting similarities and differences between them. The third chapter, in three sections, deals with the impact of Zakat and taxation on economic development. The first section focuses on the general concept of development, its types and aims. the second tackles the impact of Zakat on the economic development through its influence on general consumption and investment. The impact of Zakat on jobs, employment increment, general welfare, fighting money stockpiling, encouraging means of crediting and its effect on the economic cycle were all discussed. The third section discusses the impact of tax on development through influencing production factors, capital, and labor. It also elucidates the tax impact on prices and how that affects both consumption and saving and how it finally affects investments. I concluded the study with important findings and recommendations, the foremost among them are : conducting extensive and detailed studies on the Islamic economic system singling out in a precise and detailed manner the major role Zakat plays as an important economic tool, that deserves our concern,in order to reveal its comprehensive economic impact .

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