Professional Documents
Culture Documents
Issue to be discussed The state of economy after 60 years The role of the government
Governments
proactive Fiscal Policy Eradication of Zulm Concept of Taxation in Islam Bait-ul-Maal Subsidy Powerhouse Inflation control Pro-employment policies Pro-development policies Monetary policies
Important Hadith
Narrated Abu Huraira : The Prophet (s) said, "When an adulterer commits illegal sexual intercourse, then he is not a believer at the time, he is doing it, and when a drinker of an alcoholic liquor drinks it, then he is not a believer at the time of drinking it, and when a thief steals, then he is not a believer at the time of stealing, and when a robber robs, and the people look
what problem ?
The solution ?
Ayah Verily! Allah commands that you must ignored render back the trusts to those, for to whom they are due; and that when you judge betweencenturies! men,
you judge with justice. Verily, how excellent is the teaching which He (Allah) gives you! Truly, Allah is Ever All-Hearer,
Establishment of Justice
Governments Role
To provide & facilitate in the peoples interest, as ordered by ALLAH Build economic environment Provide ALL kinds of safety Implement Shariah with enforcement !
Leader Status!
It has been narrated on the authority of Abu Malik that Ubaidullah b. Ziyad visited Ma'qil b. Yaser in the latter's illness. Ma'qil said to him: I am narrating to you a tradition. If I were not at death's door, I would not narrate it to you. I heard the Messenger of Allah (may peace he upon him) say:
A ruler who, having obtained control over the affairs of the Muslims, does not strive for their betterment and does not serve them sincerely shall not enter Paradise with them.
(Sahih Muslim, Hadith # 4502) Abu Nasr Al-Farabi said:
All injustices in the name of ISLAM Intention: to please other than ALLAH Excessive taxes & inefficiencies
Excessive luxuries/protocols
Blatant ignorance
Approximately 96 ministers Rps 100,000 monthly mobile balance 25 monthly air tickets only
Rps 100,000 x 12 = 1,200,000 25 air tickets x Rps 20,000 x 12 = 6,000,000 1,200,000+ 6,000,000 = 7,200,000
What about other judges, 7,200,000 x 96 ministers = technocrats, dignitaries, 691,200,000 ambassadors, generals, ~ Rps 70 Crore governors, beaurocrats, &
Abd al-Rahman bin Shumasa who said: I came to A'isha to inquire something from her. She said: From which people are you?
I said: I am from the people of Egypt. She said: What was the behaviour of your governor towards you in this war of yours? I said: We did not experience anything bad from
Pro-active Governance
Maximize GDP
Pro-competition Anti-Monopoly
Eradication of all un-islamic practices & injustices Lawful dealings only (ban all Satanic trades) Avoidance of Gharar (uncertainties) Eliminating hoarding, shortage, monopolies Cheating & fraud totally unacceptable
Taxation in ISLAM
100% 0%
taxation ?
taxation ?
more the tax, the more the inefficiencies, corruption, luxuries & protocols
Hadeeth on Taxation
The Prophet (s) said: He who imposes maks [Sales Tax] will Not enter paradise.
(Ahmed & Ad-Darmi)
Uqbah ibn Amir heard the Prophet (s) say: One who wrongfully takes an extra tax (sahib maks) will not enter Paradise.
(Sahih Muslim, Hadith # 2931)
Hadeeth on Taxation
The Prophet (s) said: When someone offers an excuse to his fellow Muslim and the later does not accept it, his sin sin is like the crime of imposing taxes.
(Ibn-e-Majah)
"I urge him (i.e. the new Caliph) to take care of those non-Muslims who are under the protection of Allah and His Apostle in that he should observe the convention agreed upon with them, and fight on their behalf (to secure their safety) and he should not over-tax them beyond their capability."
(Saheeh Bukhari, Book #52, Hadith #287)
Only a few taxes in Islamic Republic of Pakistan Income tax CVT General Sales VAT Tax CST Service Tax Octori Fuel TDS Adjustment ESI Charges EoBI Petrol Levy CGT Excise Duty STT Customs Duty Dhal Property Tax Fees Stamp Duty Local Cess Aabiana Local Cess
In addition to Water Tax other Professional important Tax taxes Road Tax Education Cess Wealth Tax Tax on tax Capital Gain Tax Congestion Levy Compulsory Deduction Minimum turnover tax
Receivers of Zakat
Poor Needy Travelers To
reconcile hearts towards islam (Dawah) To spread Islam (Jihad) Collectors of Zakat Freeing slaves Debtors
Sadaqah-Charity
A
religious obligation changing humanities attitude towards the have-nots concept of saving = Sharing ? concept of wealth
The
The
Hadeeth: Sadaqah-Charity
The best charity is to satisfy a hungry person.
efficient management of natural resources (oil, gas, chromite, marble, precious stones, etc)
no natural resources, must be creative & innovative (Coke/Pakola, medicine, handicraft, hand made wonders, etc)
If
efficient management of natural resources Creative & innovative Zakat & Sadaqah Jizyia Ushr & Kharaj Anfal & Fai Mudarbah & Musharikah When all the above are available, is
Problem of unemployment, over-employment, & national inefficiency Converting population into skilled-labour
U$ Gun Law!
Land development
Hadhrat Aisha (r) reported that the Prophet (s) said: Whoever colonizes a land which does not belong to another, has the better right to keep it. Urwa Bin Zubair (r) states tha Hadhrat Umar (r) acted upon the same rule during his reign.
(Bukhari, Muslim & Nisai)
Public interest
Abdullah bin Abbas (r) reported that the Prophet (s) said: All Muslims are partners in 3 things: 1. In water, 2. Herbage and 3. Fire
(Abu Dawoud & Ibn Majah)
Abu Hurairah (r) reported that the Prophet (s) said: Dont withhold excess water so as to prevent therwith (the growth of) additional herbage.
Hima is a grass land with water which preIslamic Arabs used to reserve for their own cattle 7 animals.
Biggest
DEFLATION ??
Which is more powerful Fiscal or Monetary?
Inflation 3
1960
1965
1970
1975
1980
1985
1990
1995
2000
1,000
M2
500
Velocity
0
1960
1965
1970
1975
1980
1985
1990
1995
2000
1000
percent growth
100
10
Israel 1983-85
Poland 1989-90
Brazil Argentina Peru Nicaragua Bolivia 1987-94 1988-90 1988-90 1987-91 1984-85
inflation
/4
1.33
12
4 Money demand
(Low)
Quantity of Money
(High)
MS1
MS2
(Low)
/4
12
14
B Money demand
(Low) 0
M1 M2
(High)
Quantity of Money
Isnt this market crash situation Severe drought High unemployment (30%) similar to the High Inflation current Social unrest Pakistani Increase in organized crime economic Fear of spreading communism disaster ? Dwindling economy Capital flight Banking system failed
Stock
Maximizing GDP (Investment, Production, Export), Minimize government spending on luxuries Tax rate ~ ZERO Real use of Bait-ul-Maal (Zakah Fund, Sadaqah Funds, resource harvesting/mining) Subsidization of all core consumer items (wheat, rice, sugar, petrol, gas, electricity, cement, plastic, metal, wood, etc) Education 100% FARD Transforming population into labor force Widely dispersed vocational training institutes, avoid non-sense industries Nurturing & retain human capital Promote permanent residency (only temporary travel) Curb capital flight, pro-investment Strategic employment Pro-competition, anti-monopoly Build infrastructure (roads, electricity, gas, water, education, health, etc)
Economic Roadma
Meat (6kg x 125) 800 Chicken (6kg x 80) 480 Beef (6kg x 80) Fish (6kg x 40) Pulses (7kg x 30) 210 Vegetables (40kg x 9) Fruits (18kg x 10) 180 Rice (30kg x 30) 900 Wheat (30kg x 20) 600 Sugar (7kg x 18) 126 Spices (3.5Kg x 40) 140 Milk (30ltrs x 10)
480 240
360
Rent 1,000 Transportation 150 Water 20 Electricity 170 Gas 80 A balanced budget, Phone 40 in an economy School fees 240 accommodating the Medicine 10 poorest! Books 40 This is only 1 fruit of Clothing 100 adopting the Shariah! Cleaning 80 Entertainment 50 This would cost more than Toys 25 Rps 60,000 in todays manDurable goods 200 made, interest-based, taxEmergency 100 based, pro-democratic, corrupt economy! Saving 100 Miscellaneous 100 More than 60% of Other 86 Pakistani today dont earn Total 8,000 more than Rps 178/day!
Elimination of taxes Introduction of subsidies on core consumer items Elimination of interest Promoting competition, eliminating monopolies Elimination of profiteering Bigger question Eliminating luxuries & protocol ofit happen? will government officials Abu Nasr Al-Farabi said: Exporting of excess production Obedience is Extraction of natural resources freedom, Boost investment While coercion is Strategic use of Baitul-Maal (zakat, slavery
Economic stability Controlled inflation, even deflation in some cases Elimination of poverty Economic growth Self sufficiency A super power house
Case study: Libya Under Ghadafi Rule (only a partial Islamic System)
Banks state owned, giving 0% interest Free electricity Newly wed given $50,000 (60,000 dinar) to start Mother get $ 5,000 for new born Free Education (otherwise $ 2,300/monthly for abroad) Free Health (otherwise $ 2,300/monthly for abroad) 83% literacy (25% university graduates) Farmers given all for free: land, house, fertilizer, seeds, equipment Pertrol price $0.14/liter (Rps 12.5/liter) 0 national debt Foreign exchange researve : $ 150 billion Percentage of oil sale given to all Libyans in their accounts
Islamic Economics: is the knowledge, application of injunctions & rules of the Islamic Jurisprudence that prevent injustice in the gaining & disposal of material resources in order to provide satisfaction to human beings & enable them to perform their obligations to Allah & the society.
Ibn Khaldun is accepted as the father of Economics of all times, even by Adam Smith; Ibn Khalduns economics is based on these 4 fundamental Islamic principles: All wealth belongs to Almighty Allah. Man is the trustee of wealth. Hoarding of wealth is prohibited. Wealth must be in circulation at all
Islamic economics aims at the study of human recovery achieved by organizing the resources of the earth on the basis of cooperation & participation.
pure divine is a world apart for the man made, error prone, plagued with interest group maneuvering Combine law with the spiritual (& moral obligation) This translates into be will obedience & compliance
Do justice, that is nearer to piety, and fear Allah; Undoubtedly , Allah is aware of your doings. (Sourah Al-Maidah, ayah # 8)
No
economy has performed as stated theoretically made economies have evolved, adapted and failed economy has always succeeded when applied
Human
Islamic
Allah has promised those among you who believe, and do righteous good deeds, that He will certainly grant them succession to (the present rulers) in the earth, as He granted it to those before them, and that He will grant them the authority to practise that which He has chosen for them (i.e. Islam). And He will surely give them in exchange a safe sec after their fear (provided) they (believers) worship Me and do not associate anything (in worsh But whoever disbelieved after this, they are the Fasiqun (rebellious, disobedient to Alla (Sourah Nour, ayah # 55)
If only one day of this world remained, Allaah would lengthen that day (according to the version of Za'idah), till He raised up in it a man who belongs to me or to my family whose father's name is the same as my
who will fill the earth with equity and just as it has been filled with oppression and
(according to the version of Fitr).
Musnad Ahmed:(1/448) & (1/376/377). Also authenticated by Dr Bastawi in Al-Mahdi Al-Muntadhar, page Abu Dawoud: Kitab Al-Mahdi, volume 3, page 1191, hadeeth # 4269.
He will reject and say: We give and dont take. Mattar is a follower of the followers (Tabi Al-Tabiyeen).
Al-Fitan (99), and Al Waredah fi Al-Fitan (5/1064), # 585. Authenticated by Dr Bastawi in Al-Mahdi Al-Muntadhar, page 226, # 18. Conclusion: Isnad are saheeh.
Al-Imam Muhammad ibn Al-Hasan Al-Mahdi, who will fill the earth with justice and equality as it has been filled with injustice and despotism, behind whom Maryams son (Jesus will pray, and by whom Allaah will perfect His light and the believers w
Quoted from Al-Samawi, Dr Muhammad Al-Tijani. Translator Hasan Muhammad Najafi. The Shia:The Real Followers of the Sunnah (Ash-Shia Hum Ahlul-Sunnait. Ansariyan Publications, Iran
He will destroy the Antichrist and will live on the earth for forty ye The Muslims will pray over him.