The word Zakat comes from the root Zaka, which means “became cleaner”. Zakat is the Islamic version of tax, which amounts to 2.5 percent of whatever money a person owned, but did not use, for a whole year. In Islamic philosophy, stored money is like stagnant water. It gets rotten with time, unless there is a circulation mechanism, and Zakat is the circulation mechanism for money.
Implementing Zakat will be a good step toward easing the world out of its many miseries under the current financial system.
Taxes should be paid for money owned, not money earned or products purchased. Taxing the income of working people and sparing the trillions of dollars that are piled in the banks unused, while millions are dying from hunger, is wrong, and in Islam it’s a sin. So is interest, which is one of the biggest sins in Islam.
In the current system money flows in one direction—to the top. It almost never goes back down. Those with lots of money have more power and many tools to generate more money from those in the bottom. But this money never leaves their bank accounts. Those on top withhold this money from society, forcing the most vulnerable people out of the system, into poverty, homelessness, and starvation.
With time, those on top will have a monopoly over money, and they can dictate the conditions according to which money can be circulated down to society. They end up having control of societies, media, and politicians, which causes corruption, and gives them the power to use media to delude society into wars for their profit, or distracts them from pollution and all the other miseries that this greed is causing to humanity and to our planet.
The only way to ease the world out of this vicious circle of control is to provide an alternative path for money to go to the bottom, without the conditions of those on top. This annual circulation of funds is necessary to “steam out” the system, and allow proper functioning of economies.
Zakat should not be viewed as charity, but rather as an obligation on the rich, and a right of the poor and of society.
Zakat can be collected either by a publicly regulated authority or allocated by the givers themselves to publicly recognized and licensed charities. This money will then be used for the needs of the poorest people, or used for other purposes, like education, health care, disaster relief, infrastructure projects, job creation, and even to fund truly independent and free media.
All of these areas are suffering in the world today, and they are all in desperate need of the circulation of these unused funds. This small percentage will not affect the wealth of anyone, but on the other hand it will be a very helpful annual supply to the world, to the poor, and to the economy.