The revenues of the Bait ul-Mal as decided by Shar’a are enough to manage the affairs of the citizens and to look after their interests. The matter does not require the imposition of direct or indirect taxes. Yet Shar’a, as a precaution, classified the needs of the Ummah into two parts: One part of these needs the Shar’a obliged on the Bait ul-Mal i.e. on the permanent revenues of the Bait ul-Mal. Concerning the other part of these needs, Shar’a obliged it on all the Muslims, and gave the State the right to collect funds from them to meet these needs. Therefore, taxes are of those revenues, which Allah (swt) placed on the Muslims so as to discharge their interests. And Allah (swt) made the Imam a guardian over them, where He collects these funds and spends them in the way He decides fit. It is proper for these collected funds to be called a tax and to be called a due fund or called otherwise. No taxes are taken other than those revenues which Allah (swt) obliged and Shar’a stated, such as the Jizya and Kharaj, and those which Allah (swt) obliged the Muslims to fund their expenditure, such as roads and schools. So no fees are taken for the courts, the State departments, or for any other service. As for the customs taxes, they are not considered to be part of the collected taxes, they are rather dealing with other states the same way they deal with us, and they are not a tax to meet the expenses of the Bait ul-Mal, and Shar’a has called them Mukus (customs), and it prohibited that they are collected from Muslims and Dhimmis. Other than the taxes that Shar’a prescribed, absolutely no tax should be taken, because it is not allowed to take from the Muslim funds anything without a divine right which the detailed Shar’a evidences explained. And there is no evidence indicating the permissibility of taking any tax from any Muslim, except those mentioned earlier. As for the non-Muslims, no taxes are taken from them, as the discharging of the needs of the citizens, which the Shar’a obliged was laid upon Muslims only, so taxes are only taken from Muslims. No tax is taken from non-Muslims other than the Jizya alone; and the Kharaj is taken from the Muslims and non-Muslims on the Kharaji land. As for how the tax is taken from Muslims, it is taken from that which exceeds their expenditure (Nafaqah), and from that fund which is legally considered to be given out of sufficiency (Ghina).

What is considered to be out of sufficiency is that which exceeds the satisfaction of one’s basic needs and one’s luxuries in a seemly way, because the Nafaqah (financial support) of the individual upon himself is to meet all his needs which require satisfaction in a seemly way, and according to the standard of living with which He lives in the community. This amount is not evaluated with a specific amount for all the people, rather it is estimated for every person according to his standard of living. If He was of those who needs a car and a servant then the amount is decided as that which exceeds this. And if He needed a wife, the amount is estimated as that which exceeds his marriage requirements, and so on. If what He owned exceeded these needs, a tax is collected from him, and if it did not exceed that, no tax is collected, because He would not be free of want.

When taxes are imposed they should not be aimed at preventing the increase of wealth of individuals, nor preventing people from becoming rich, because Islam does not prohibit one from becoming rich. No other economic factor is considered for collecting the taxes; rather the tax on the funds is taken on the basis that the funds available in the Bait ul-Mal have to be enough to meet the needs required of it. So taxes are taken according to the needs of the State for its expenses, and nothing is considered in that case except the needs of the citizens and the ability of the Muslims to pay the taxes. Tax is not estimated according to increasing or decreasing (or variable) ratios. Rather it is estimated with one ratio upon all Muslims regardless of the amount of the funds from which it is taken. When the ratio is estimated, justice amongst Muslims has to be observed, so it is not taken except out of sufficiency, and it is taken from the whole amount that exceeds the needs, and not from the income only, with no difference between capital, profit or income, so it is taken from all the funds. The production tools necessary for work in industry and farming, nor land, or immovable property are considered part of the capital.