Part Two: Economic System of Islam under the Islamic State of Khilafah

The Islamic State of Khilafah is founded upon the laws emanating from Allah (swt) i.e. from the Shari’ah (Qur’an and Sunnah). This State is in existence for two main roles, execution of the Shari’ah within its jurisdiction and to carry the Islamic Da’wah across the world in order to liberate humanity from the slavery of worshiping man to that of worshiping the Creator of all creations under the just Islamic ideology.

Amongst the systems of Islam is that of the economy. An economic system means the relationship between people and their needs, means to meet their needs and utilization of these means. Islam recognizes that man is limited and so are his needs are limited to organic needs and instincts. The means (property) to satisfy needs are numerous and available across the world. The utilization (distribution) of these means is the root-cause for economic problems facing humanity because of ownership. In order to solve them, it is compulsory to refer to the thoughts that emanate from the creed (viewpoint on life). The Islamic creed is None has the right to be worshipped except God, Muhammad is the messenger of God. Based on that, the economic system of Islam has come to solve the wealth distribution based on the Shari’ah. On the contrary is that the Secular creed, which separates religion from life; it states that the economic problem is scarcity of goods and services and cannot meet the ever-increasing needs of man! Their economic solution is for capitalists (company owners) to continue producing goods and services to meet the needs of man!

The Economic Policy of Islam under the Khilafah is to ensure that every individual (its citizens) is able to meet his basic needs completely that are food, clothing, and shelter and help him to realize the luxuries.  A person can meet his needs by working. If he is not able to work, the guardian takes care of him, if the guardian is not able. The State will take care of him. In the Khilafah there is no taxation like the way it is witnessed today for instances (PAYE, VAT, NHIF, NSSF, Housing Fund etc.). This means Islam has clearly expounded on the sources of revenues and means of distribution or expenditure. Revenues for instance are Zakat, Kharaj, Ushr, Fai etc. As for taxation like what is happening today in secular regimes like Kenya, it is prohibited in Islam unless on exceptional crisis and temporarily. This situation will cause life to be easy because people will be able to meet the price of goods and services contrary to the current situation under secular regimes including Kenya!

Islam has categorized property in three; private property, public property and state property. Private property is that which is possessed and expended by an individual via permissible (Halal) means only. An individual can possess property through five means: working, inheriting, obtaining funds for the sustenance of life, receiving State grants as a citizen and property obtained without exchanging funds or work. Public property are the items that the legislator made their ownership belong to all Muslims, a joint ownership between them, and prevented individuals from their ownership, such as electricity generators, power plants, gas factories, coal, and minerals that are in abundance, that are not limited, whether solid such as gold and iron, or a liquid such as oil, or gas such as natural gas, all of these and similar ones are public property owned by all Muslims, shared ownership, and it is a source of funds of Bait ul Mal of Muslims, distributed by the Khalifah to them, in accordance with the Shari’ah rules. It is not permissible for the Khalifah to give its ownership to any one, whether an individual or group; because it belongs to all the Muslims collectively.

الْمُسْلِمُونَ شُرَكَاءُ فِى ثَلاَثٍ الْمَاءِ وَالْكَلإِ وَالنَّارِ

Muslims are partners in three: water, pasture and fire

 [Ahmad na Ibn Maja]

State property is any piece of land or building connected to a right of all the Muslims; it is separate to public property. State ownership can be of land, buildings, transferrable objects, that are linked to a right of the general Muslims according to Shariah rules, the Khalifah has the authority to manage, monitor, and make decision regarding the property. The Khalifah can give their ownership to individuals, and the title (ownership) and benefit, or benefit without ownership (of the neck), or to allow them to be revived and owned, and he can dispose of it in the manner that he sees for the interest of the Muslims. The Khalifah has permission to give from the state ownership of land for the one who does not have agricultural land, the person can cultivate it and it becomes his property.

كَىۡ لَا يَكُونَ دُولَةَۢ بَيۡنَ ٱلۡأَغۡنِيَآءِ مِنكُمۡ‌ۚ

so that it will not be a perpetual distribution among the rich from among you

[Al-Hashr: 7]

The Khalifah has no permission to take away from someone’s private property wrongfully and then gives it to another, but he can give from the state ownership for the poor and not the rich. These properties are stipulated by the Shari’ah rules, it is not permissible to change its classification, so the public ownership is not changed to private ownership, like giving the right for oil exploration and extraction to a private company, the so-called “privatization”, this is turning public property to private ownership. Likewise, it is not permissible to transfer private property to state property, like taking away by force the shop of a person and is made the ownership of the state, which is called nationalization.

Islam under the Khilafah will ensure that its citizens are in a piety environment that lead them to have mercy between themselves:

“The believers in their mutual kindness, compassion and sympathy are just like one body. When one of the limbs suffers, the whole body responds to it with wakefulness and fever.’

[Bukhari and Muslim]

The kindness will be to all citizens under the Khilafah due to the execution of the Shari’ah, which include permitting trade and prohibiting usury, gambling, deception in trade, monopoly in property and trade, price-fixing on goods and services etc. Due to the comprehensive execution of Islam for 13 Centuries until its destruction on 28 Rajab 1342AH same as 3 March 1924CE the citizens under the Khilafah ware able to see practical how the economic system of Islam liberate people from poverty. The situation will return when the Islamic way of life resumes through the establishment of the State of Khilafah on the method of Prophethood.

On the contrary, we shall continue to suffer under these secular regimes. Perpetual are exploiting their citizens economical via taxation, which in origin should not have been case. Furthermore, they collude with colonial institutions like World Bank and International Monetary Fund, and taking loans from nations like China, Britain etc. plunge them in interest debts-slavery! The wealth that Kenya is blessed with by Allah including minerals, oil, agricultural lands etc. all have been privatized while majority of citizens continue to sink in extreme poverty! The lucky ones to be employed are paid meagerly depending on an estimation of their low expenditure and mindboggling-taxation occurs in the same amount! The same regimes are always on the rush calling for “paying taxes is self-reliant” And acting blind when colonial multinationals pillage public property and easing their so-called “investments” by removing taxation on them!

Participate in our Special Campaign on the theme: Increased Cost of Living: Islam Is The Solution by following this hashtag: #IncreasedCostOfLiving_IslamIsTheSolution also by visiting the following Links:

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Ali Nassoro Ali

Member of the Media Office of Hizb ut Tahrir in Kenya