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‫بسم هللا الرحمن الرحيم‬
Presentation on
Righteous Economy
Islamic perspective of wealth and economics
Instructor:Dr.Hajredin Hoxha –Qatar University 2013
by Mohammed Mudassir Hoque
&
Muhammad Faraz Khan
Outline
Overview
of Islamic
Economy
Foundation
of Islamic
Economy
Primary
Goals of
Islamic
Economy
References
& Further
Reading
© Mohammed Hoque (2013)
2
Overview of Islamic Economy
History
Banking
Important
Terminologies
•
Islamic
•
Economics •
in the
•
•
world
Zakat
Jizya
Nisab
Khums
Sadaqah
(waqf)
• Bayt al-mal
• Taxes
•
•
•
•
•
Riba
Murabaha
Takaful
Sukuk
Qard hassan
© Mohammed Hoque (2013)
Inheritance
Laws of
inheritance
(of property
and wealth)
as explained
in the Quran
and Sunnah
3
Foundations of Islamic Economy
Encouraging business and all other
kinds of permissible work
Forbidding all unlawful work
Implementing Zakat
Public funds for public welfare
Laws of inheritance and
redistribution of wealth
© Mohammed Hoque (2013)
4
Primary Goals of Islamic Economy
Self-sufficiency
Efficient use of resources
Growth of individuals and society
Reducing the gap between the rich and poor
Social welfare and social security
Fair redistribution of wealth
© Mohammed Hoque (2013)
5
Establishment of Islamic Economy
“and establish prayer and give zakah
and loan Allah a goodly loan.” Quran,
73:20
 Quran, Surah Al Baqarah, 2:262-282
describes the Islamic rulings for buying/
selling and all forms of exchanges

© Mohammed Hoque (2013)
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Key Terminologies
Zakat: growth; (obligatory) purifying alms
Sadaqah (waqf): (vlountary) charitable donations
Riba: any increase in repayment of loan, generally, interest.
Jizya: a poll tax imposed on non Muslims who are defeated in jihad and stay
under the Islamic state's authority in exchange for their protection and
security
Tax: a financial charge or other levy imposed upon a taxpayer (an individual
or legal entity) by a state
© Mohammed Hoque (2013)
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Key Terminologies
Nisab: is the minimum amount that a Muslim must
own before he is obligated to give zakat.
Khums: refers to a religious obligation to contribute
one-fifth of a certain type of income to charity;
applicable to spoils of war
Bayt al-mal: “House of Wealth”; a financial institution
responsible for the administration of taxes in Islamic
states, particularly in the early Islamic Caliphate
© Mohammed Hoque (2013)
8
Forbidding Riba (Interest and Usury)
And whatever you give for interest to increase
within the wealth of people will not increase
with Allah . But what you give in zakah,
desiring the countenance of Allah - those are
the multipliers (Quran, 30:39).
O you who have believed, do not consume
usury, doubled and multiplied, but fear Allah
that you may be successful (Quran, 3:130).
© Mohammed Hoque (2013)
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Collection of Zakat
Zakat is an obligatory charity, which
is only collected from Muslims, who
have wealth equivalent to Nisab
(after meeting his necessities)
Value of Nisab is about 85 grams of
gold or 595 grams of silver
No Zakat is due on wealth until one
year passes from the day of
acquiring the wealth
© Mohammed Hoque (2013)
10
Zakatable items
Zakatable items include – livestock, gold,
silver, currency, jewelry, commercial assets,
agriculture, honey, animal products, mining,
fishing, rented buildings, plants, fixed capital,
salaries, wages, professional incomes,
bonds, stocks, shares
 In general, growing assets are zakatable
 There are exceptions to specific jewelry used
by women such as pearls and other precious
stones. Detailed information can be found in
books of Fiqh.

© Mohammed Hoque (2013)
11
Categories of Zakat Recipients as Mentioned in the Quran
“Zakah expenditures are
only for the poor and for the
needy and for those
employed to collect [zakah]
and for bringing hearts
together [for Islam] and for
freeing captives [or slaves]
and for those in debt and for
the cause of Allah and for
the [stranded] traveler - an
obligation [imposed] by Allah
. And Allah is Knowing and
Wise.” Quran, 9:60
© Mohammed Hoque (2013)
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Distributing Zakat
© Mohammed Hoque (2013)
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Inheritance
The Quran and Sunnah explain in detail
about how property and wealth should
be distributed among the relatives after
the death of a Muslim.
 The Shariah also commands to fulfill the
liabilities and testaments of the
deceased before the wealth is
redistributed amongst the relatives.

© Mohammed Hoque (2013)
14
Scholars differ on the issue of
Taxes
State taxes are not religious obligations
 Taxes should only be collected if there
are no alternatives for the general
welfare of the country such as building
roads, schools, hospitals and so on.
 All taxes must be used explicitly for the
benefit of the people

© Mohammed Hoque (2013)
15
Production in Islamic States
Business: Allah has prohibited Riba and
permitted business
 Jobs: People are encouraged to work
righteously to earn their living
 Manufacturing: many Muslim countries
depend on non Muslim countries for
many products. Muslims should strive to
be self-sufficient

© Mohammed Hoque (2013)
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Encouraging People to Work

“The upper hand is better than the lower
hand (i.e. he who gives in charity is
better than him who takes it).” Sahih
Bukhari
© Mohammed Hoque (2013)
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Forbidding the unlawful trades
Riba: interest
Hoarding: stock up anything that the people need in order to
sell later for higher profit
Deceit: using deceptive means to sell products
Trading in haram things: trading alcohol, pork, and other
haram things
Extravagance: wasting money, property, unnecessary luxury
© Mohammed Hoque (2013)
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Prohibitions & Permitted
•
•
•
•
•
Haram
Halal
Riba (Interest)
Hoarding
Deceit
Trading in haram things
Extravagance
• Honest business activities
• Profit gained through
business
• All kinds of jobs (that are
not explicitly forbidden)
• Trading permissible goods
• Earning profit without
cheating
• Moderate in spending
© Mohammed Hoque (2013)
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Benefits of Islamic Economy








Transparent transactions between buyer and seller –
prevents cheating and distortions
Interest-free (free from Riba) commodities are less
expensive
Seller should highlight any deficiency in the products that
he is selling – avoid conflicts and amiable environment and
mutual trust amongst people
Barakah in dealings and lives
Free from haram
Strengthen economy amongst Muslim countries
Practicing zakat globally will reduce poverty and significant
improve the lives of many people
All dealings are rewarded by Allah
© Mohammed Hoque (2013)
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References & Further Reading
Ideal Muslim Society by Muhammed Ali
Hashimi
 Fiqh al Zakah by Yusuf Qaradawi
 Introduction to Islam by Yusuf Qaradawi
 Production and Economic Development
published by islamweb.net

© Mohammed Hoque (2013)
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