Islam has a unique system of taxation where there is no taxation of the poor. There are only three types of regular taxes levied from those people who are able to pay:

1. Jizyah - Is a tax on mature male non-Muslim citizens who are able to pay it. This is much less than any tax on Muslim citizens.

2. Ushr - Is a tax levied on unconquered land under the jurisdiction of the State, at the rate of one tenth of the produce if the land is irrigated by rain, or one twentieth if it is artificially irrigated.

3. Kharaj - Is a tax levied on conquered land, whose rate is fixed by the Khaleefah.

There are no income taxes.

There is no Value Added Tax (VAT).

There are no Death Duties.

There is no Road Tax.

All these examples are included among the taxes in the West where it is the poor that suffer the most.

The Khaleefah ‘Umar ibn Abdul Aziz at one stage could not find a poor person to give zakat to during his rule (7th Century CE).

In the entire history of Spain, it was economically at its most prosperous during the period of Islamic rule. Never before or since has it been so successful.

Under Islam, Africa sent food to relieve famine in Madinah. The Khaleefah - ‘Umar ibn al-Khattab sent the following letter to Amr ibn al-‘A’as, the governor of Egypt regarding the means of transporting the supplies :

“Arrange to dig the canal from the River Nile up to the Sea even if you have to spend the entire treasury of Egypt in the undertaking.”.

Zakat is not part of the Islamic economic system.

Public resources such as sources of water like rivers and lakes, sources of energy like electricity, and public utilities like parks, roads and railways cannot be privatised according to the wishes of the government. They remain public property as originally classified by Islam according to their nature. They will always remain public and cannot be owned by individuals who may charge excessively and prevent the vital requirements of the people getting to them, as happens in the West.

It is compulsory on the husband to work to earn nafaqah (provision) for his family, but if he cannot do so for any genuine reason, it is the responsibility of the State to provide tangible basic needs of food, clothing, shelter; and intangible needs of education, health and security.

Hoarding of wealth is prohibited, even if you are willing to pay zakat on it. This makes it available for the markets, boosting the economy and preventing the wealth from merely making a circuit amongst the rich.

Currency in the Khilafah can only be based on gold and silver. Thus it will be of real value itself, providing stability in the economy. It cannot be reproduced or destroyed, which would cause devaluation and inflation.

The Islamic system has 5 types of company structure : anan, abdan, mudharaba, mufawadha and wojooh.

1. Anan (Company of Equals) - Partnership between two people, both contributing capital and effort.

2. Abdan (Company of Bodies) - Company in which two or more persons participate by their effort only, without their capital.

3. Mudharaba (Company of Capital and Effort) - A company in which one part provides the capital while the other provides the effort.

4. Wojooh (Company of Faces) - A company involving two or more parties who provide the effort with another party who guarantees the financial support.

5. Mufawadha - This is a company which combines any of the other 4 types of company structures permitted by Islam.

Stocks and share companies (Plc’s) are not allowed in Islam as they do not fall into any of the permitted categories, having an incorrect company structure, and so are invalid.

The Islamic economy focuses on ensuring the effective distribution of created wealth and resources, rather than amassing these in useless stockpiles. Thus the satisfaction of the basic necessities of food, clothing and shelter for all citizens be they Muslims or non-Muslims is the priority.

If you find derelict land anywhere you may make use of it without anyone’s permission.

In the 8th and 9th century, Iraq under Islam had a population of 30 million (compared to 18 million today). 80% were farmers with modern irrigation systems from the rivers Tigris and Euphrates. The ratio of yield of seed for wheat in the Muslim world was 10:1 at this time compared to only 2.5:1 in Europe.