Shaikh, Salman (2009): An Alternate Approach to Theory of Taxation and Sources of Public Finance in an Interest Free Economy.
Download (131kB) | Preview
This unique study discusses the theory of taxation in Islam and the role of Zakat in an Islamic economy. Zakat is a compulsory payment i.e. a tax in this sense paid to the government on one’s income and wealth. The Zakat rates are studied for their viability and effectiveness to fulfill fiscal needs of the government. Based on the evidence from many countries, it is argued that Zakat rates are substantial enough to generate the needed public finance given the large tax base and free the government from using seignorage and deficit financing. Its compulsory nature both as per law of the land and as per religion would ensure minimum tax evasion and its progressive and direct nature would effectively redistribute income. The effect of Zakat on the overall macroeconomy, the financial system, monetary system, property market, stock market, inflation, foreign debt, balance of payments, FDI and the on the development oriented variables like inequality and poverty are also discussed to give a holistic view of the effects of the proposed system.
|Item Type:||MPRA Paper|
|Original Title:||An Alternate Approach to Theory of Taxation and Sources of Public Finance in an Interest Free Economy|
|Keywords:||Interest free economy, Public finance, Taxation, Inequality, Income redistribution, Islamic Economic System, fiscal policy, deficit financing.|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy
H - Public Economics > H2 - Taxation, Subsidies, and Revenue
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents
|Depositing User:||Salman Shaikh|
|Date Deposited:||05. Jan 2010 11:37|
|Last Modified:||11. Feb 2013 17:10|
Darrat, Ali, F. & Bashir, M. Abdul-Hameed (2000). “Modeling Monetary Control in an Interest Free Economy”. J.KAU: Islamic Economics, Vol. 12, pp. 3-19.
Ghamidi, Javed A. (2007). “Meezan”. Lahore: Dar-ul-Ishraq.
Hashmi, Tariq (2002). “Condition of Tamlik in the Payment of Zakah”. Renaissance. Vol 12, Issue 10.
Islahi, Amin A. (1985). “Tauzeehat”. Lahore: Islamic Publications.
Liam, Murphy & Thomas Nagel. (2002). “The Myth of Ownership: Taxes and Justice”. London: Oxford
Maududi, Sayyid Abul A'la (1970) Ma’ashiyat-e Islam [Economic System of Islam], Lahore: Islamic Publications.
Siddiqui, Sajidur R. (2006). “Studies in Islamic Jurisprudence: Zakat and Tax.” Beirut.
Reddy, B.Muralidhar (2001). “Of Religion and Economics”. Frontline. Vol. 18, Issue 11.
Saleem, Shehzad (1992). “Islamic Concept of Taxation”. Renaissance. Vol 02, Issue 10.
Usmani, Muhammad T. (2003). “Islam Aur Jadid Maeeshat-o-TIjaraht” [Islam and Contemporary Economics], Karachi: Maktaba ma’ariful Quran.
Usmani, Muhammad T. (2009). “Ghair Soodi Bainkary” [Interest Free Banking], Karachi: Maktaba Ma’ariful Quran.