Zakāh On Non-Current Banking Debts: A Review And Assessment Of The Theoretical Framework

Abstract

This research examines the issue of zakāh on non-current banking debts within its theoretical framework. The main problems dealt with are the conflicting contemporary juristic opinions on the issue of zakāh on non-current banking debts as well as the conflicting ways that these opinions have been implemented. This makes it necessary to pinpoint the most important causes for the controversy and to identify the weightiest opinion on the matter. The study begins by defining non-current banking debts and identifying their most salient characteristics. It then undertakes an explanation of the classical scholarly controversy regarding zakāhon debts which are not yet due. The authors have chosen the second view, which is that zakāh is obligatory on debts that are currently due and upon the capital and profits that will come due during the current financial year. Nevertheless, the authors see the necessity of an empirical study relying upon experts in the calculation of zakāh to explore the economic impact that implementation of each of the three views mentioned would have and to choose the opinion that secures justice for both sides of the zakāh function (those upon whom it is due and its rightful recipients). Regarding the aggregate wealth upon which zakāh is due, the study has examined the views of contemporary scholars on the zakātablewealth of financial institutions. This is determined by accounting for all of the institution’s assets and all of its liabilities. The study explains the most prominent resolutions on this matter, as well as the evidence cited, without voicing a preference for one resolution over another. The study also deals with the scholarly controversy regarding the zakāh obligation on the government’s share in Islamic financial institutions in which it owns all or part of the shareholder capital. The authors favor the third approach regarding the obligation of zakāh on mixed wealth, that if the government rules it to be obligatory it shall be levied on all the shares, including those of the government.