JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 18, 2020 ZAKAT ON MINERALS: A THEORETICAL ANALYSIS Pg Mohd Faezul Fikri Ag Omar1*, Mohd Nur Hidayat Hasbollah Hajimin2, Hazmi Dahlan3 1,3Labuan Faculty of International Finance, Universiti Malaysia Sabah 2Centre for The Promotion of Knowledge and Language Learning, Universiti Malaysia Sabah *Corresponding author’s email: [email protected] ABSTRACT: Zakat is one of the obligations in Islam, as mentioned in the divine revelation. Apart from zakat imposed on an individual, zakat is also imposed on salary or income, business earnings, share or investment, agriculture produce, livestock, and gold and silver. Although technically both gold and silver are minerals, different categories of minerals are not given due attention regarding their zakat. This study analyses the zakat on minerals, which includes the discussion of its due obligation, the rate of zakat imposed and the haul and nisab on minerals, among others. The discussion on zakat on minerals in this study is based on the books written by prominent contemporary Muslim scholars. This study found that zakat on several minerals is yet to be exercised although it is obligatory to pay its due zakat. The lack of various mechanisms concerning the mineral assessment, evaluation methods to name it few, hindered the exercise of zakat on minerals to be implemented. This study sheds light on the need to introduce a comprehensive mechanism regarding zakat on minerals, thus expedite its implementation in Islamic countries. A clear new commitment on the zakat on minerals and its due attention should remain as the focus for future studies ahead. KEYWORDS: Zakat on minerals, zakat collection, rate of zakat, zakat institution, potentials and challenges I. INTRODUCTION Zakat is one of the pillars of Islam and has been obligated upon Muslims, as mentioned in the divine revelation in Surah Al-Baqarah, verse 43 (Quran, 2:43). Zakat is divided into two main categories, namely zakat al-fitrah (upon the individual) and zakat al-mal (upon wealth or property) (Al-Qardawi, 2011; Al-Zuhaili, 2010). While zakat al-fitrah usually paid at the end of the fasting month of Ramadan, zakat al-mal, on the other hand, paid upon the completion of one-year requirement known as haul, and upon reaching a certain minimum amount of gold-based ratio known as nisab. The practice of zakat is about payment of a portion of wealth that belonged to a wealthy individual to be given to the eight eligible groups of zakat recipients known as asnaf. The recipients of zakat had been stated clearly in the Quran in the Surah Al-Tawbah, verse 60; “[Alms-tax is only for the poor and the needy, for those employed to administer it, for those whose hearts are attracted to the faith, for freeing slaves, for those in debt, for Allah’s cause, and needy travellers. This is an obligation from Allah. And Allah is All-Knowing, All-Wise]” (Quran, 9:60). As stated in the Quranic verse, the recipients of zakat or better known as asnaf, include al-fuqara (the poor), al- masakin (the needy), al-Amil (the admins for zakat), al-mualaf (one whose heart attracted to Islam), al-gharimin (person who is in debt), al-riqab (a slave or servant), ibn sabil (one on a journey or travel), and fisabilillah (whose on the cause of Allah) (Omar, Wahid & Noor, 2017; Akmal, 2016). The underlying theory behind the obligation of zakat can be categorised into two primary goals, namely spiritual objective and material objective. The ultimate spiritual aim behind the obligation of zakat is the purification of one’s wealth that had been accumulated in his lifetime to get the blessings from the Almighty (Koco & Suratno, 2017; M.A., Akmal, 2016). This goal can only be achieved by fulfilling the divine order in paying zakat that was due on one’s wealth. The spiritual purpose also relates to getting rid of one’s envy towards others, showing the spirit of altruism, brotherhood and inclusiveness. On the material perspective, a certain amount of wealth that must be given to the recipients of zakat or asnaf should contribute directly to the socio-economic benefits of the asnaf (Wahid & Ahmed, 2014; Omar et al., 2017; Embong, Taha, & Nor, 2013; Ayuniyyah, Pramanik, Saad, & Ariffin, 2018; Debnath, 2015; Firmansyah, 2013; Romdhoni, 2017; Shaikh & Ismail, 2017). The socio-economic benefits include but not limited to the availability of money for their daily needs, start-up their own business array, addressing their education affairs, and many more. Besides, there are certain wealth’s that subject to zakat, such as earnings, business inventory, agriculture products, livestock and gold and silver (Al-Qardawi, 2011; Al- Zuhaili, 2010). 3619 JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 18, 2020 The minerals as it is known in this modern world is somewhat different than the minerals that were known then. At that moment, only two distinct minerals were identified as precious at that moment, namely gold and silver. Gold and silver were sought after for various reasons and purposes, even made as a currency of dinar and dirham by Arabs. The trading activities that use gold and silver were made possible because of the abundance of gold and silver at that time. The pieces, as mentioned earlier of evidence, explained why the discussion on zakat at this particular period revolves only around gold and silver. As written in the history, the minerals of oil and gas were made known to the Arabs only at around the 19th century, when they first discover the existence of oil and gas beneath their land to be exact at 1936 (Hymel, 2007). The discovery was way long after the Islamic jurisprudence discussion on zakat by the prominent scholars in the body of knowledge itself. It justifies why no in-depth discussion on imposing zakat on gas and oil among scholars in the past. Even though zakat on gold and silver were discussed continuously in academic writings, this is not the case for the zakat on minerals in general. This raises considerable concern about the topic of zakat, especially zakat on minerals in the bigger context, inclusive of gold and silver. In this modern world, there are around 5000 to 6000, types of minerals were reported to be found and registered (Hazen, Hystad, Downs, Golden, Pires & Grew, 2015). These minerals are deemed precious as they were gold and silver, ranging from rock or solid minerals to the liquid minerals found beneath the earth surface. Therefore, this study believes that research gaps that exist regarding zakat on minerals are what motivates this research to uncover the importance of its discussion and further implementation in the future. This study aims to discuss zakat on minerals from the theoretical perspective, and further analyse in detail several essential points, such as the rate and nisab of zakat on minerals, as well as its obligation. The primary reference book for this study is the book Fiqh Al-Zakat by Yusuf Al-Qardawi. The reason for the selection of this book is because it is a comprehensive book that compiled all traditional and contemporary views of scholars, especially on zakat. Nevertheless, this book was authored by a prominent Muslims scholars Yusuf Al-Qardawi, a much-respected modern scholar of the time. His thoughts and views are sought after by Muslims all over the world. The study begins the analysis with the overview of zakat and its practice, followed by the theoretical discussion on zakat on minerals. Next off, the rate of zakat on minerals, and subsequently the haul and nisab of its zakat. After that, the study also presents the theoretical framework of zakat on minerals. Besides the potentials and challenges in implementing its zakat also touched. Finally, some recommendation for further studies on zakat on minerals is discussed in the final topic of this study. II. AN OVERVIEW OF ZAKAT AND ITS COMMON PRACTICE Zakat means growth, cleanse, purity and that of the same meaning to it (Ibn Manzur, 2014). Al-Qardawi (2011) also defined zakat as growth, clean, blessing and mentioned that the obligation of zakat was clearly stated in the Quran in Surah Al-Baqarah, verse 4; “[And be steadfast in prayer; practise regular charity; bow down your heads with those who bow down (in worship)]” (Quran, 2:43). The practice of zakat is about payment of a portion of wealth that belonged to a wealthy individual to be given to the eight eligible groups of zakat recipients known as asnaf. As stated in the aforementioned Quranic verse, the recipients of zakat or better known as asnaf, include al-fuqara (the poor), al-masakin (the needy), al-Amil (the admins for zakat), al-mualaf (one whose heart attracted to Islam), al-gharimin (person who is in debt), al- riqab (a slave or servant), ibn sabil (one on a journey or travel), and fisabilillah (whose on the cause of Allah) (Omar et al., 2017; Akmal, 2016). The underlying theory behind the obligated exercise of zakat can be categorised into two primary goals, namely spiritual objective and material objective. The ultimate spiritual aim behind the obligation of zakat is the purification of one’s wealth that had been accumulated in his lifetime to get the blessings from the Almighty (Koco & Suratno, 2017; Akmal, 2016). This goal can only be achieved by fulfilling the divine order in paying zakat that was due on one’s wealth. The spiritual purpose also relates to getting rid of one’s envy towards others, showing the spirit of altruism, brotherhood and inclusiveness. On the material perspective, a certain amount of wealth that must be given to the recipients of zakat or asnaf should contribute directly to the socio-economic benefits of the asnaf (Wahid & Ahmed, 2014; Omar et al., 2017; Embong, Taha, & Nor, 2013; Ayuniyyah, Pramanik, Saad, & Ariffin, 2018; Debnath, 2015; Firmansyah, 2013; Romdhoni, 2017; Shaikh & Ismail, 2017).