Updated: Jul 2, 2020
Zakat is a cornerstone of Islamic social finance. A tax on wealth and income, zakat (Arabic: azkāt, “that which purifies”) is a type of obligatory alms-giving..
It is not a charitable donation but the duty of each Muslim who meets the necessary criteria of surplus wealth. Muslims believe that paying zakat purifies, increases and blesses the remainder of their wealth.
Zakat is based on the value of a person’s disposable wealth owned for the period of a full Islamic (lunar) year. It must be paid if the minimum amount, known as nisab, is reached.
How zakat may be used?
The Qur’an details who can benefit from zakat:
“Zakah expenditures are only for the poor and the needy, and for those employed to collect [Zakah] and for bringing hearts together and for freeing captives and for those in debt and in the way of Allah and for the traveller – an obligation imposed by God and God is Knowing and Wise”. (Qur’an 9: 60).
In modern public finance terms, zakat can be used to:
reduce absolute and relative poverty
fund the administrative overheads/salaries of staff dealing with Zakat-funded public welfare programmes
build peace and community cohesion
promote freedom, human rights and civil liberties
meet personal insolvency settlements
fund security and defence
help homeless people, refugees and migrants.
Islamic Relief, like many other Islamic charities, offers to collect and distribute zakat.