The Islamic system of taxation represents an attempt to reconcile the actual practices of taxation with Islamic principles and to harmonize the potential dissonance between administrative and religious concerns.
During the time of Muhammad, there was no established system of taxation. The community’s income was based on ad hoc support for specific purposes, on donations, and on part of the booty from raids. In addition, an alms tax (zakat or ṣadaqa) was levied on Muslims, while subdued tribes or communities had to pay a tribute called jizya. With the early Islamic conquests, the situation changed. The Muslims concluded treaties of submission with conquered cities, which varied widely with respect to the taxes or tributes to be paid. They also inherited the elaborate tax systems of the Byzantine and the Sasanian empires and at first relied on the same personnel and the same administrative procedures in collecting the taxes. The diversity and heterogeneity of these systems accounts for many discrepancies in the legal rulings and in the use of technical terms in the literature on taxation.
From the eighth century onward, jurists made various attempts to develop an Islamic concept of taxation based on the Qur’an and the examples set by the Prophet Muhammad and the first caliphs. Although the jurists disagreed in many details, the theoretical framework of the classical taxation system is rather uniform, relying on a more or less fixed corpus of scriptural sources. This theoretical framework did not change fundamentally in the centuries to come, although it did not comply with the fragmented practice of actual taxation.
The development of an Islamic tax system can also be interpreted as the emancipation of legal thinking from the constraints of practical politics. While in early Islamic times rulers did not face serious religious opposition when they fixed taxes, scholars now reduced the religiously sanctioned options of raising taxes or imposing new ones. Although numerous taxes and customs duties were levied, they were mostly disapproved of by the jurists. It was only in Ottoman times that the rulers succeeded in controlling the legal community more effectively and therefore received religious sanction for their fiscal measures.
The Islamic laws of taxation are based on the legal status of the taxable land, on the one hand, and on the communal or religious identity of the taxpayer, on the other hand. All Muslims were liable to an alms tax on a specified part of their property. Non-Muslims under Islamic dominion (dhimmīs) had to pay a poll tax (called jizya like the tribute of earlier time) of a fixed amount. The land tax (kharāj), which accounted for the largest part of the state revenue, was at first imposed only on non-Muslims but was soon considered to be incumbent on the land and therefore due on Muslims as well.
The various taxes were different in character and served different purposes. Zakat is a religious duty—in fact, one of the Five Pillars of Islam—and served the purification of the giver. It was meant to contribute to the reduction of social and economic disparities, and it was to be paid even if there was no legitimate government to collect it. Jizya, on the other hand, was intended, among other things, to demonstrate the inferior status of the dhimmī. Other taxes, like the land tax, did not have specific religious connotations.
At least in theory, the revenues from the different taxes were to be kept in separate accounts, since there were religious sanctions as to their respective distribution. During classical times, the military and the palace administration accounted for most of the expenditures of the state. As the revenues depended heavily on the amount of land to be taxed, both territorial losses and the practice of assigning land to military leaders decreased revenues and made tax assessment a difficult task.
In modern times, some Muslim states attempted to reintroduce an Islamic system of taxation; mostly this involved the levying of zakat in addition to other, not specifically Islamic taxes, such as income tax. The revenue from zakat usually amounted only to a small percentage of the total tax revenue. In contemporary Islamist discourses, writers call for the reintroduction of zakat for Muslims and the imposition of jizya for non-Muslims.
See also economic theory; jizya
Further Reading
Abu ‘Ubayd al-Qasim b. Sallam, The Book of Revenue (Kitāb al-Amwāl), translated by Imran Ahsan Khan Nyazee, 2002; Nicolas Aghnides, Mohammedan Theories of Finance, 1916; A. Ben Shemesh, Taxation in Islam, 3 vols., 1958–69; Daniel C. Dennet, Conversion and the Poll Tax in Early Islam, 1950; Baber Johansen, The Islamic Law on Land Tax and Rent: The Peasants’ Loss of Property Rights as Interpreted in the Hanafite Legal Literature of the Mamluk and Ottoman Periods, 1988; Frede Lokkegaard, Islamic Taxation in the Classical Period, 1950; Abu al-Hasan al-Mawardi, The Ordinances of Government (al-Aḥkām al-Sulṭāniyya w’al-Wilāyāt al-Dīniyya), translated by Wafaa H. Wahba, 1996.
ANDREAS GÖRKE