What is the Difference Between Tax and Zakat
What is the Difference Between Tax and Zakat? The primary objective of Both the Zakat and tax is to collect it from higher income groups of the society and distribute or expense out on the lower side. Unequal distribution of wealth is the main cause of unrest in society. We can use these two for the welfare of the citizens of any country.
About Tax
Equal distribution of wealth is very important for the welfare of society. It is the state’s responsibility to provide the basic needs of life to the masses. The state does this by collecting taxes from the higher-income groups of society. Tax is a major source of income in any country and it can utilize for welfare as well as development works in the country.
Tax is a state-administered system and society comply it as its responsibility. Changes in tax laws happen every year through financial acts. Every country passes its budget in National Assembly which becomes law.
About Zakat
Zakat is a religious matter. The state does not bound to pay it by law, but every Muslim considers it as its religious responsibility to pay minimum zakat @2.5% every year. There is no limit on the maximum payment of zakat. It’s every Muslim’s source of Income that decides what he will contribute towards zakat. The faith of a Muslim also motivates him to contribute towards zakat.
Sometimes, a person falls under a low-income group, but he pays more zakat as compared to his Muslim brother who is more wealthy. It all depends on his faith in Allah.
Zakat means: Purity, Increase, betterment, blessings, and growth. The Arabic word, “Zakat” has come about 30 times in Quran. It is our religious responsibility to pay zakat. If the zakat collection and distribution system work well then no one can face poverty in the world. Zakat is a very important thing for Muslims, and they can use it for the welfare of society. Allah also promises that He will give you more if you spend money in way of Allah.
Difference Between Tax and Zakat
Zakat and tax are different in many respects. Let us discuss the main differences between tax and zakat:
| S.NO | ZAKAT | TAX |
| 1 | Zakat is related to Religious. | Tax is related to state / Government. |
| 2 | On the other hand, Zakat is only payable by Muslims. | Tax is collected from all the citizens of a country. |
| 3 | Zakat is fixed as per the Holy Quran and cannot be changed by any person. | Tax system is man made and changes are expected. |
| 4 | Zakat is a permanent system | Tax is not a permanent system. |
| 5 | Zakat is calculated at 2.5 percent of the annual income of a person or a family. | The government has certain rules and regulations for fixing tax (tax provisions). |
| 6 | Zakat is given out of the surplus wealth or earnings. | Tax is some time given on taxable income also without deducting expenses, like Tax on alary. |
| 7 | Zakat is utilized only for poor segment of society. | Tax is used for welfare and development projects, means both for poor and wealthy segments of the society. |
| 8 | Zakat is paid once a year | Tax is paid according to requirements of tax laws of the country. |
| 9 | Zakat is not compulsory from state. | Government forces tax on the citizens. |
