A Review on the Contribution of Zakat and Taxation towards Economic Development Postulated by Two Contemporary Research Scholars

Abstract

This paper is an attempt to analyze the contributions of zakat towards an economic system. Often zakat is viewed as a taxation tool which is focused on anti-poverty policies, especially during the classical Islamic Civilizations. The paper will review and discuss postulations bought by Russel Powell and his attempt to conceptualize zakat as a modern taxation system, and Monzer Kahf and his analysis of how zakat can truly impact economies in modern times. The precedes of such discussions have found that zakat is not an equal substitute for modern-day taxation systems, and more importantly, it was never truly designed to solve all poverty issues in existence. There is a reconciliation that zakat plays a more important role in spirituality than it does in worldly pragmatism. Needless to say, zakat has contributed to poverty alleviation in the past, however along with other pivotal mechanisms concurrently in place such as Awqaf (endowments) and Infaq (disbursements).