Tax Be Counted as Zakat?
Many people say: “We already pay heavy taxes to the government, so why pay zakat? Isn’t tax the same as zakat?” The feeling is understandable, but the Islamic answer is clear: tax is not a substitute for zakat. This guide explains why, along with related practical issues.
Why Tax Is Not Zakat
1. Zakat is worship: Like prayer and fasting, zakat is a pillar of Islam and requires intention. Tax is a legal payment made without the intention of worship.
2. Allah defined zakat’s recipients: Zakat may only be spent on the eight categories named in Surah At Tawbah 9:60. Tax is spent on roads, defence, salaries and every kind of state expense.
3. Zakat’s rate and threshold are fixed: The Sharia fixed zakat at 2.5 percent with a defined nisab, while governments change tax rates according to their needs.
4. Zakat is the right of the poor: The Prophet Muhammad صَلَّى اللهُ عَلَيْهِ وَعَلَى آلِهِ وَسَلَّمَ said zakat is taken from the wealthy and returned to the poor (Sahih al Bukhari, Hadith 1395).
For these reasons, Mufti Muhammad Taqi Usmani and contemporary scholars generally hold that income tax and other taxes do not count as zakat.
How Tax Affects Your Zakat
Tax is not zakat, but it can reduce the amount of zakat you owe:
Taxes due are deducted: Tax that you owe on your zakat date is deducted from your zakatable wealth, like any other debt.
Taxes as expenses on income: In calculating zakat on income from buildings and factories, Shaykh Yusuf al Qaradawi counts taxes among the expenses deducted before zakat (Fiqh al Zakat, Urdu translation, p. 617).
Example: Someone has 100,000 in zakatable wealth and owes 10,000 in tax. Zakat is due on 90,000, which is 2,250.
Zakat Collected by Governments
In some countries, the government collects zakat directly, for example by deducting it from certain bank accounts once a year. When such a deduction is made specifically as zakat and distributed through an official zakat system, scholars generally hold that it counts as zakat.
Deduct it from your annual calculation and pay the rest yourself. This applies only to amounts taken as zakat, not to ordinary taxes.
A Final Word
Tax is the right of the state zakat is the right of Allah and the share of the poor. Paying one does not cancel the other. However taxes due can be deducted from your zakatable wealth and zakat collected officially as zakat can be counted towards it.
