Zakaat on shares and raw materials
Question:-
1. If a person is selling products, would they have to pay Zakaat on the raw materials stored for making the products? If so, what price would they pay on?
2. How would a person work out Zakaat on shares?
Answer:-
1. When an individual purchases raw materials for manufacturing products with the intention of resale, then these raw materials should be included in their Zakaat calculation. The market value of the raw materials should be taken into consideration when calculating Zakaat. [[i]].
2. It is obligatory to pay Zakaat on shares. However, there is some detail to this based on whether the share was purchased for reselling, or to receive a dividend.
2.1 If an individual has bought a share with the primary intention of selling it for capital gain, then Zakaat will be payable on the market value of the share at the time when one is paying the Zakaat.
2.2 If the share was purchased in order to receive a dividend, then one will pay Zakaat on one’s shareholding in the company (excluding fixtures and fittings). Also, if the dividends accrued from the company are available on one’s Zakaat date (when calculating one’s yearly Zakaat), then one will be required to pay Zakaat on the dividends as well.
For example, a person purchases a share in a company whose dealings are Shariah compliant. 20% of the company’s capital is cash, 20% is gold/silver assets, and 10% is stock in trade. All of these Zakaatable assets equal to 50% of the total value of the company. The remaining 50% of the company’s assets comprise of non-Zakaatable items such as, machinery, tools of trade, etc. So, in this case, the individual has to pay Zakaat on 50% of his share only, as only 50% of the company’s capital is Zakaatable [[ii]]. If he invested R100 000.00, then he will pay Zakaat on R50 000.00, which is R1250.00.
[i][i] بدائع الصنائع في ترتيب الشرائع (2/ 13)
وَأَمَّا الْأُجَرَاءُ الَّذِينَ يَعْمَلُونَ لِلنَّاسِ نَحْوَ الصَّبَّاغِينَ وَالْقَصَّارِينَ وَالدَّبَّاغِينَ إذَا اشْتَرَوْا الصَّبْغَ وَالصَّابُونَ وَالدُّهْنَ وَنَحْوَ ذَلِكَ مِمَّا يُحْتَاجُ إلَيْهِ فِي عَمَلِهِمْ وَنَوَوْا عِنْدَ الشِّرَاءِ أَنَّ ذَلِكَ لِلِاسْتِعْمَالِ فِي عَمَلِهِمْ هَلْ يَصِيرُ ذَلِكَ مَالَ التِّجَارَةِ؟ رَوَى بِشْرُ بْنُ الْوَلِيدِ عَنْ أَبِي يُوسُفَ أَنَّ الصَّبَّاغَ إذَا اشْتَرَى الْعُصْفُرَ وَالزَّعْفَرَانَ لِيَصْبُغَ ثِيَابَ النَّاسِ فَعَلَيْهِ فِيهِ الزَّكَاةُ، وَالْحَاصِلُ أَنَّ هَذَا عَلَى وَجْهَيْنِ: إنْ كَانَ شَيْئًا يَبْقَى أَثَرُهُ فِي الْمَعْمُولِ فِيهِ كَالصَّبْغِ وَالزَّعْفَرَانِ وَالشَّحْمِ الَّذِي يُدْبَغُ بِهِ الْجِلْدُ فَإِنَّهُ يَكُونُ مَالَ التِّجَارَةِ؛ لِأَنَّ الْأَجْرَ يَكُونُ مُقَابَلَةَ ذَلِكَ الْأَثَرِ وَذَلِكَ الْأَثَرُ مَالٌ قَائِمٌ فَإِنَّهُ مِنْ أَجْزَاءِ الصَّبْغِ وَالشَّحْمِ لَكِنَّهُ لَطِيفٌ فَيَكُونُ هَذَا تِجَارَةً، وَإِنْ كَانَ شَيْئًا لَا يَبْقَى أَثَرُهُ فِي الْمَعْمُولِ فِيهِ مِثْلُ الصَّابُونِ وَالْأُشْنَانِ وَالْقِلْيِ وَالْكِبْرِيتِ فَلَا يَكُونُ مَالَ التِّجَارَة؛ لِأَنَّ عَيْنَهَا تَتْلَفُ وَلَمْ يَنْتَقِلْ أَثَرُهَا إلَى الثَّوْبِ الْمَغْسُولِ حَتَّى يَكُونَ لَهُ حِصَّةٌ مِنْ الْعِوَضِ بَلْ الْبَيَاضُ أَصْلِيٌّ لِلثَّوْبِ يَظْهَرُ عِنْدَ زَوَالِ الدَّرَنِ فَمَا يَأْخُذُ مِنْ الْعِوَضِ يَكُونُ بَدَلَ عَمَلِهِ لَا بَدَلَ هَذِهِ الْآلَاتِ فَلَمْ يَكُنْ مَالَ التِّجَارَةِ.
الفتاوى الهندية (1/ 172)
وَأَمَّا إذَا كَانَ يَبْقَى أَثَرُهَا فِي الْمَعْمُولِ كَمَا لَوْ اشْتَرَى الصَّبَّاغُ عُصْفُرًا أَوْ زَعْفَرَانًا لِيَصْنَعَ ثِيَابَ النَّاسِ بِأَجْرٍ وَحَالَ عَلَيْهِ الْحَوْلُ كَانَ عَلَيْهِ الزَّكَاةُ إذَا بَلَغَ نِصَابًا، وَكَذَا كُلُّ مَنْ ابْتَاعَ عَيْنًا لِيَعْمَلَ بِهِ وَيَبْقَى أَثَرُهُ فِي الْمَعْمُولِ كَالْعَفْصِ وَالدُّهْنِ لِدَبْغِ الْجِلْدِ فَحَالَ عَلَيْهِ الْحَوْلُ كَانَ عَلَيْهِ الزَّكَاةُ، وَإِنْ لَمْ يَبْقَ لِذَلِكَ الْعَيْنِ أَثَرٌ فِي الْمَعْمُولِ كَالصَّابُونِ وَالْحُرْضِ لَا زَكَاةَ فِيهِ كَذَا فِي الْكِفَايَةِ.
[ii] Fataaawa Mahmoodiyya (V.9 Pg 419)
ALLAH TA’ALA KNOWS BEST!
ANSWERED BY:
Mufti Abdur Rahman Abdur Razak
Date: 08 Shawwal 1444 / 29 April 2023
CHECKED AND APPROVED BY:
Mufti Mohammed Desai