This is to seek clarification on opinion of respected Mr. Javed Ahmad Gamidi on zakat on salary and professional income, which he derived mainly through an analogy with zakat on agricultural production.
I requesta response on below three concerns, which seemingly prohibits the creation of analogy between agriculture production and income from professional services/salary and thus levy of zakat on such services:
1. Dissimilar Nature of Agriculture Production and Professional Services Study on zakat on agriculture production evidently reveals that basically zakat is levied on agriculture output itself in a quantitative manner rather than on its realizable or realized value. Hence, sales price is not relevant for calculation of zakat on production. Whether realized or not zakat is collected from physical produce at time of harvest. Once zakat is paid on a produce it can be stored for years without paying any further zakat on that production. However, if it is sold and money realized, zakat is payable on money on which year has passed. Zakat on produce shall however be paid if it is acquired for trading in the nature of business merchandise with that money and year has lapsed. (Summarized concept based on Imam Malik’s Al-Muwatta) Comparing the above with income from professional services, a clear distinction in the nature of two heads can be marked that, unlike agriculture produce, services lack physical or tangible output from which a zakat can be collected. If monetary value of services is made a basis for calculation of zakat, it contradicts with the very nature of agriculture production where monetary value of produce is irrelevant, hence precluding us from drawing an analogy between the two . Further, service is merely a form of labor and one of the factors of production, not a production itself. There is no zakat on factors of production rather it’s the actual physical output. Physical significance of production for zakat is further evident from the fact that there is no zakat on perishable fruits, vegetables and herbs. It reinforces the understanding that zakat is on physical production rather than its realizable value. If this notion was not correct, sales value of perishable produce could have well been assessed and paid through money or some other non-perishable produce of equal value. Further there could have been a zakat on these produce upon sales if needed at all, no such arrangement was made. Non collection of zakat on perishable produce signifies that since such produce is not collectable nor distributable so no zakat was imposed. The same analogy applies to professional services i.e. they are non-collectable and non-distributable and hence non-zakat -able.
2. Burden of Labor and Factor of Nature’s Support Labor aspect in Professional services differs greatly from agricultural produce. Professional services output continues as long as the person is at work. As soon as work stops, production stops (linear relationship). This is not the case with agriculture, where though labor is required but its major role is played by nature to bring that produce to life. Agriculture produce is underpinned by a great deal of element of ‘freebie’ from nature. Output of agricultural produce is generally much higher than the input of time and energy, e.g. small number of grains could produce hundreds or thousands of new grains. While in case of services, output is restricted to the amount of time and energy input without observable nature’s support. Such natural support is the main factor which distinctly set professional services apart from ‘labor only’ category of agriculture production. As a an evidence of recognition of human effort for zakat purposes, it may well be observed from the pattern of zakat rates ( 5%, 10% and 20%) that any increase in human burden (cost or effort) lowers the zakat level and vice versa. Now professional services, though may ostensibly and conveniently be classified under ‘labor only’ category, yet burden of output for services is highly dependent upon human effort rather than the nature as in the case of agricultural produce. Hence based on subtle pattern embedded in zakat rates, professional services may not simply be considered a ‘labor only’ activity similar to agriculture and thereby attracting 10% zakat levy. This either signifies a need to deduce a new rate of zakat for income from services, corresponding with human burden without nature’s support, if at all to be levied or be content with the idea that income from services was never intended for zakat due to its different nature and/or burden of output.
3. Risk of Bid’ah Zakat, as we all know very well, is an obligatory ibad’ah just like prayer, fasting etc. Extending the scope of this ibad’ah based on principle of modern era developments, appears to be unconvincing and rather entails the risk of creating a bid’ah. Concept of salaries and professional services is not a novel idea of modern economics and was well known at the time Prophet (PBUH) and four rightly guided Caliphs. The argument that since such services were not the major part of economic activity in those times and hence not included, appears to entail a fallacy. It may well be inferred that, in the very presence of services in those times, had the intention not been there to exclude them from zakat, a guiding principle towards the level of exemption would have well been provided. Hence based on the highly dissimilar nature of agriculture production and professional services, drawing resemblance of the two to suggest an additional zakat head is not only akin to comparing apple with oranges, it severely entails the risk of creating a bid’ah by enhancing scope of an obligatory act.
Allah knows the best