In verse 177 of Surat Baqara we hear about six types of people who are recipients of charity money:
1) dhawu ’l-qurba: friends and acquaintances who are not blood related (because blood relatives would be ulu ’l-qurba);27
2) al-yatama: orphans;
3) al-masakin: handicapped people, those whose body functions are paralysed or ‘still’ (sakana);
4) ibn al-sabil: people on a journey who are stranded because of mishaps such as robbery or a car accident;
5) al-sa”ilin: people in need as a result of natural disasters such as floods, earthquakes, famines,or hurricanes;
6) fi’l-riqab: those, as defined earlier, who are indebted without a chance to pay off their debts. If we read the verse farther down we see that ‘regular alms-tax’ (zakah) is mentioned separately, and we know why, because this is a special tax of the Muslim-Believers and an exclusive pillar of Eman.
Charity money, as mentioned first in the verse, is, however, part of islam and given to people in need, needless of their religious affiliation. Verse 60 of Surat Tawba even mentions eight types of recipients:
1) al-fuqara”: the poor,
2) al-masakin: the handicapped,28
3) al-‘amilin ‘alaiha: those who administer the zakah tax,
4) al-mu”allafa qulubuhum: people whose work has a positive impact on public life,
5) fi’l-riqab: the financially enslaved,
6) al-gharimun: people in debt and imprisoned because of their insolvency, 7) fi sabil Allah: donations ‘in God’s way’ to sponsor the foundation of universities, schools, hospitals, and
8) ibn al-sabil: travellers in need of assistance.
These eight types of recipients are entitled to charity from within Eman, that is, they are the recipients of zakah, the lowest type or minimal amount of sadaqa. Three types of recipients are mentioned in both suras:
- a) travellers in need of help,
- b) the handicapped, and
- c) the financially enslaved, implying that these people are entitled to charity regardless of their religious affiliation.
In contrast, three types in the first sura are not mentioned in the second sura and will therefore not receive money through zakat Eman:
- a) orphans, b) acquaintances, and c) people in need because of natural catastrophes. That leaves us with five types of recipients who receive alms by virtue of their religious affiliation to Muhammad and Eman: a) the poor, b) the zakah administrators, c) people who improve public life, d) people imprisoned because of their debts, and
- e) those who sponsor institutions of public health and education.
- Loans: Zakah and sadaqat are for those who cannot repay their debts.We cannot expect any return for what we donate to them. Others, however, can repay their debts but without having accrued interest. They would receive an interest-free loan which defines a financial transaction being at point zero:
If you do it not, take notice of war from God and His apostle. But if you turn back you shall have your capital sums [ru”oos amwalikum]. Deal not unjustly and you shall not be dealt with unjustly. (Baqara:279)
If people are wealthy enough to repay the borrowed money with interest (e.g., people working in industry, agriculture, the financial and service sectors, and such, in short the great majority of society), one should not, as verse 130 of Surat al ‘Imran demands, asks for more than 100 percent interest of the original loan, that is, at maximum twice the borrowed sum, regardless of how long it takes to repay the debts:
O you who believe! Devour not usury, doubled and multiplied; but fear God that you may (really) prosper. (al ‘Imran:130) Finally, why does verse 275 contain the following clause?
…but God has permitted trade and forbidden usury (Baqara:275). The answer is given in verse 276 that immediately follows:
God will deprive usury of all blessing, but will give increase for deeds of charity; for He loves not creatures ungrateful and wicked. Baqara:276). We understand that 2:276 prohibits the payment of interest on money given in charity but allows recipients of charity to earn income through trade. In 2:275, Allah thus ‘permitted trade’ for recipients of charity but forbade charging interest on the money they receive through charity. In other words, while profit through trade is allowed, profit through charity is forbidden.
It must not be understood, as can frequently be heard, that, through 2:275, Allah has allowed all types of trade while forbidden all types of interest. Such an unqualified statement would imply that, before Allah’s revelation concerning trade and interests all trade was forbidden and all types of interest were allowed which would, of course, be historically untrue and economically absurd.
Instead, Allah wanted to clarify the position of the recipients of charity. If He had not allowed people to trade with profit, we would be in a grotesque situation in which every businessman ought to check whether his trade partners are entitled to charity or not; if so, the partnership would have to cease immediately.
In order to avoid such chaotic and counterproductive trade arrangements and to separate trade from charity, verse 2:275 was revealed. This had a huge impact on society since it allowed welfare organizations, hospitals, charity banks, mental institutions, old people’s homes, and such to receive charity money regardless of their commercial and financial activities.
If we look at the existing fiscal arrangements in most countries of the world we see how it corresponds best to the human disposition (al-fitra). We conclude by discussing the main differences between our proposed theory of limits and conventional fiqh jurisprudence:
- We do not treat the legal verses of the Book as codified law but as signposts or ethic al-legal markers that Allah asked human beings not to overstep. Traditional fiqh jurisprudence has regarded the legal verses as absolute law which allowed neither mitigation nor adaptation to changing social and cultural circumstances. Our theory of limits aims to regain the flexibility and elasticity in human legislation that was originally built into the divine text but which was removed by an overly rigid system of fiqh jurisprudence. We re-emphasize the high degree of universality ..