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PRE-EXAM QUESTIONSPES

RE-DISTRIBUTION OF WEALTHRE-DISTRIBUTION OF WEALTH

Q. 14. How is wealth accumulated and mobilized in Islam?

Q.15. What do you understand by the term compulsory sector? How can this sector contribute to the development of an economy?

Q.16. What do you understand by the term voluntary sector? How can this sector contribute to the development of an economy?

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Compulsory Zakah

Definition of zakah. Objectives of zakah Why it is compulsory? Who must pay the zakah and to whom to be distributed

to? Its types and role in the economy?

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Types of Zakah

1. Zakah Fitr

2. Zakah Al-Mal (on wealth)

3. Ushr (for agricultural land)

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2. Zakah al-Mal (Cont.)

Zakah al-Mal can be subdivided into Zakah on:

Business Rental Income Personal Income Savings Gold and Silver Shares Livestock Crop (ushr)

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Jiziah and Kharaj

Non Muslims who live in a Muslim country have to pay:

JiziahJiziahJiziahJiziah KharaKharajj

KharaKharajj

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Jizyah and Kharaj

Definition of jizyah and Kharaj Why it is compulsory? Who must pay the Jizyah and Kharaj? Its types and role in the economy?

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Voluntary Sadaqah

Definition of Sadaqah Its objective and its role in the society

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Voluntary Takaful/Ta'awun

Definition of Takaful Its objective and its role in the society .

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What are the Benefits of

Takaful/Ta'awun? 1. Fulfils the social obligations towards community and

family.

2. Enables financial assistance for the unfortunate and needy.

3. Avoidance of Al-Riba, Al Maysir and Al Ghirar and similar prohibited elements within financial dealings.

4. Promotes moral values, ethical dealings and full disclosure in all its business activities and operations.

5. Protection of lifestyle.

6. Security for the family and the group against misfortune.

7. Through "Tabarru" donations it allows Participants to achieve self-purification and peace of mind.

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VoluntaryWaqf

Waqf  means to stop, to withhold the thing (e.g. the house is withheld for the mosque, which means that the revenue of the rent of the house is withheld to spend on the mosque).

Waqf is a financial charitable institution established by withholding one's property to eternally spend its revenue on fulfilling certain needs depending on the choice and conditions made by the founder

Once the property been created as waqf, it can never be given as gift, or to be inherited, or sold. It belongs to Allah and the corpus/waqf property always remains intact.

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Waqf in the Hadith

صدقة ( ثالث؛ من إال عمله انقطع االنسان مات إذاجارية

.( له يدعو صالح وولد به ;نتفع ي وعلم

The Prophet (s) said: When a man dies his acts come to an end, except three things, recurring charity, knowledge (by which people benefit), and pious offspring, who pray for him.

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Kinds of WaqfThere are two kinds of Waqfs:

Immovable property Includes land, fields, farms, or buildings such as mosques, schools, hospitals, or basic infrastructures such as bridges, roads, water supply etc.

Movable property Includes cattle, books, money/cash, crops and weapons, shares of Joint-Stock Company, etc.

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The terms, waqf, habs, tasbil mean ‘to stop, to restrain’ i.e. devoting in the way of Allah

“The confinement of an amount of money by a founder(s) and the dedication of its usufruct in perpetuity to the welfare of society”

 

DEFINITION OF CASH-WAQF

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Beneficiaries of Cash-Waqf

• Waqf Khayri, Waqf ‘Am (Public Waqf) is a cash endowment made by the founder to support the general good and welfare of society, the poor and the needy.

Waqf Ahl, Waqf Khas al-waqf al-dhurri and waqf ‘al-awlad are all the same and refer to family waqf/specific waqf.

Waqf Mushtarak (combined Public and Family Waqf) is a cash waqf created by a founder to support both the public and his family or specify certain persons, group of people or needy areas.

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Characteristics of Cash-Waqf Irrevocability: This means that once the founder created the

cash-waqf he cannot revoke it back, however, he/she can benefit from its investment/revenue.

Perpetually: Once the cash-waqf is created it must be perpetual. This will ensure regular and continual support from the cash-waqf to financing needy areas in the Muslim society.

Inalienability this means that once cash is created as waqf no one can ever become the owner to alienate it, i.e. it becomes a ‘frozen asset’. It cannot be the subject to be given as gift, inheritance, or any alienation whatsoever.

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Investment of Cash-Waqf

• Mudarabah (partnership) has been recommended by earlier Muslim jurists.

• The latest fatwa issued by Fiqh Academy Islam, agreed that cash waqf can be invested in any shari’ah compliant mode of investment, such as Mudharabah, Murabaha, BBA, Musharakah, Istisna, etc.

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Can Non-Muslim Create Cash-Waqf?

The Shafie School permitted the creation of waqf from a non -Muslim even if it is for the benefit of a Mosque. He based his opinion on the

following hadith :

" ( ) : ص الله رسول قال قال عنه الله رضي مالك بن انس عنبها ان ويجزى الدنيا في بها يعطى حسنة مومنا يظلم ال الله

االخرة فيحتى الدنيا في لله بها عمل ما بحسنات فيطعم الكافر واما

بها يجزى حسنة له يكن لم االخرة الى افضى ”اذاThe Prophet (pbuh) said “Allah will not oppress any Muslim from his good

deeds, as he gives it in this world and he will be rewarded in this world and in the hereafter. But for the non- Muslim he will be rewarded for all his good

deeds only in this world”

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II. MODERN APPLICATIONS OF CASH WAQF

The last two decades witness the revival of the institution of waqf and the creation of movable waqf i.e. cash waqf in almost all Muslim countries and Muslim minority countries.

The followings will highlight nine different cash-waqf models that have been practiced in 15 countries and in 3 international organizations.

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The Role of Waqf in Development

The Waqf system had played a vital role in achieving development in the following areas:

Reduces government expenditure Solve the problem of unemployment Creates cities and commercial activities Creates financial institutions. Enhances the different sectors in the Muslim

countries, agricultural, industrial, social and service sectors.