Zakah as a social responsibility for small and medium enterprises (SMEs

Abstract

Zakat is said to purify yearly earnings that are over and above what is required to provide for the essential needs of a person or family. Zakat is based on income and the value of possessions. The common minimum amount for those who qualify is 2.5% or 1/40 of a Muslim's total savings and wealth. If personal wealth is below the nisab during one lunar year, no zakat is owed for that period. One of the most profound aspects of Islam is that it takes human dignity very seriously. Distributing zakat is not handing out charity to the poor. Instead, it is essentially a due for the poor from the rich (the have –nots have a rightful share of the wealth of the rich – Al Quran) In this way, zakat is a powerful tool to help re-circulate wealth to those most vulnerable, many of whom are experiencing poverty at no fault of their own, but due to their unfortunate circumstances, such as lack of access to resources because of poverty, war and other adverse circumstances. Accordingly, zakat may be regarded as a social security system in Islam. Further, zakat means purification and growth as it washes away the greed and the acquisitive orientation of the rich. The main purpose of this paper is to study the Zakah as potential social responsibility for small and medium enterprises (SMEs).