Last updateThu, 22 Feb 2018 2pm

Charities Eye A Muslim Wealth Tax

HADEEL MAHMOOD used to be rich. Back in Iraq, she was a pharmacist, her husband was a businessman and they sent their children to private school. But when the family claimed asylum in Nottingham last year after falling out with the Iraqi government, they burned through their savings in three months.

Her husband cannot find work. “We lost everything,” she says. Now a charity has agreed to pay for Dr Mahmood to convert her qualifications so she can get a job here. She is thrilled.

The money comes from zakat, a wealth tax which requires observant Muslims to give the poor 2.5% of the total value of their financial assets each year. In some Muslim countries, it is collected by the state. British Muslims give it to mosques and charities, and to family members overseas. Yet clerics and charities have begun to argue about how it should be spent, and non-Muslim charities are eyeing up the cash for the first time. Experts reckon it could run to hundreds of millions of pounds; seven of the biggest Muslim charities in Britain collected just over £20m ($28m) in zakat in 2017.

Dr Mahmood’s training will be paid for by the National Zakat Foundation (NZF), which was founded in 2011 to encourage British Muslims to spend their zakat at home. Iqbal Nasim, head of the NZF, reckons increasing domestic giving would help British Muslims tackle poverty. Mr Nasim claims it could also “rebrand Islam”, by using the scale of its charity to combat negative perceptions of the faith. A survey by ICM, a pollster, in 2012 found that British Muslims give an average of £371 each year to charity, compared with £202 for Protestants and £116 for atheists. Mr Nasim reckons that while recent immigrants are keener to send their cash to their native countries, their children and grandchildren will want to give locally.

Others argue that poverty is graver elsewhere. Seven of the ten countries that received the most aid in 2016 were majority-Muslim. Saleh Saeed, a Muslim who runs the Disasters Emergency Committee, a co-ordination group for charity appeals, prefers to give his zakat abroad because he wants it to go to “the very poorest of the poor”.

Muslims also disagree about who should collect it. Non-Muslim charities have begun to solicit zakat to top up aid budgets. Oxfam is passing the begging bowl to rich British Muslims, Save the Children has started holding collections at mosques and Water Aid pays for a Google advert for the search term “zakat”.

But the newcomers will have to tread carefully. Many Muslims believe zakat should only be given to other Muslims, which risks compromising the humanitarian commitment to impartiality. Most thorny is the risk of offending Muslims who see the practice as a religious duty, not a charitable donation. Duncan Green of Oxfam says this is one reason for the charity’s “gently gently” approach. “The last thing you want is to be seen to be jumping on the bandwagon.” 

(Source: www.economist.com | This article appeared in the Britain section of the print edition under the headline "Alms and the imam")