Economic Advantages and Benefits of Zakat

Wed, 01/09/2013 - 03:18 -- Umar Farooq

The advantages and merits concerning to the financial matters of the Muslims are called economic advantages. Following are the economic advantages of zakat or Economic benefits of zakat.

1. Equal Distribution of Wealth

The main problem of modern economic system is unequal distribution of wealth which is the main cause of social and economic problem. Islamic economic system solves this problem with zakat in a good manner. Once government implement zakat, it will automatically solve the problem of unequal distribution of wealth because the rich people will give zakat to poor for consumption.

2. Circulation of Wealth

To gain economic development it is very important that any country’s capital should circulate instead of accumulation. If capital goes towards accumulation the economic activities will become slow. Zakat is the best tool to circulate the money in economy.

3. Economic Stability

Zakat avoids interest system. When the economy is prosperous the amount of zakat increases among poor. All these bring a balance in economic condition.

4. Solution for Unemployment

Once Dr. Keynes said, the basic reason of unemployment is the shortage of an effective demand. It is zakat through which unemployment decreased by increasing the level of effective demand. In Islamic economic system unemployment allowance can be given to unemployment persons.

5. Capital Formation

Some people avoid using their income. Neither they take benefits of nor is any other person to do so interest system, an attempt made to decrease their accumulation through interest. But in Islamic economic system there is no such room for the circulation of their accumulation except Zakat that discourages the accumulation of wealth.

6. Important Instrument of Fiscal Policy

There are three basics of government finance tax, expenditure and national loan. In Islamic economy zakat is an important essential of government finance.

7. Protection of Needy Persons

There are different people living in a society, there are some people unable to earn and depend on other for financial help through zakat. Such can be honorably protected with necessities of life.

8. Absolute Source of Government income

Islmaic state is a welfare state that has to fulfill the responsibility of the society. For the fulfillment of this duty there should be surety of National Income.

9. Increase in Collective Welfare

Another economic advantages or benefit of Zakat is that It is the most basic source of social welfare. In Islamic society zakat funds can be utilized in school and hospitals to help poor. This promotes collective welfare of the society.