Научная статья на тему 'Modern approaches to studying the Islamic taxation in the Russian market of Muslim goods'

Modern approaches to studying the Islamic taxation in the Russian market of Muslim goods Текст научной статьи по специальности «Философия, этика, религиоведение»

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Ключевые слова
ZAKAT / ISLAMIC TAXES / MARKET OF MUSLIM GOODS / ISLAMIC FINANCE

Аннотация научной статьи по философии, этике, религиоведению, автор научной работы — Shovkhalov Sh.A.

Importance The article addresses Zakat as the most important Islamic tax. Objectives The research investigates the main works on Zakat to set further vectors of respective research. Methods The comparative analysis of relevant works revealed many serious mistakes in the calculation of the Islamic tax, however, certain aspects (history, world practice, etc.) are disclosed quite adequately. Results The findings demonstrate that it is necessary to create a method to calculate Zakat for legal entities. Conclusions and Relevance Updating these issues may not only satisfy needs and questions of commercial organizations' leaders operating in the market of Muslim goods, but also help improve the social status of the society as a whole.

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Текст научной работы на тему «Modern approaches to studying the Islamic taxation in the Russian market of Muslim goods»

pISSN 2073-8005 elSSN 2311-9438

Translated Articlet

MODERN APPROACHES TO STUDYING THE ISLAMIC TAXATION IN THE RUSSIAN MARKET OF MUSLIM GOODS

Scholar Dispute

Shamil' A. SHOVKHALOV

Siberian Federal University, Krasnoyarsk, Russian Federation shovkhalov.shamil@gmail.com

Article history:

Received 13 February 2017 Received in revised form 3 March 2017 Accepted 17 March 2017 Translated 1 September 2017 Available online 15 September 2017

JEL classification: B52, H29, Z12

Keywords: Zakat, Islamic taxes, market of Muslim goods, Islamic finance

Abstract

Importance The article addresses Zakat as the most important Islamic tax.

Objectives The research investigates the main works on Zakatto set further vectors of respective research. Methods The comparative analysis of relevant works revealed many serious mistakes in the calculation of the Islamic tax, however, certain aspects (history, world practice, etc.) are disclosed quite adequately. Results The findings demonstrate that it is necessary to create a method to calculate Zakatfor legal entities. Conclusions and Relevance Updating these issues may not only satisfy needs and questions of commercial organizations' leaders operating in the market of Muslim goods, but also help improve the social status of the society as a whole.

© Publishing house FINANCE and CREDIT, 2017

The editor-in-charge of this article was Irina M. Komarova Authorized translation by Irina M. Komarova

Contemporary economists, more often than not, tend to explore possible methods for eliminating the social inequality. In this respect, economic growth becomes the issue of secondary importance. According to statistics, some advanced economies have seen the 60-percent growth in the wealthiest population (1 percent) for the recent one hundred years. Seven largest and advanced economies and seven emerging economies have the Gini index of 0.71 and 0.8 respectively [1]. O.S. Sukharev, a Russian scholar, suggests creating support system for the poor population, as an initial solution, so to improve its welfare. However, the poor population's income should outperform that of the wealthy population, since

fFor the source article, please refer to: Шовхалов Ш.А. Современные подходы к исследованию исламского налогообложения на отечественном рынке мусульманских товаров. Финансы и кредит. 2017. Т. 23. Вып. 19. C. 1144-1152. URL: https://doi.org/10/24891/fc.23.19.1144

the perceptions of poverty are difficult to neglect in comparison with the highest income level1.

According to some economists, the poor population support systems may be implemented through Zakat, one of the fundamental principles in Islam. Zakat is an obligatory contribution to certain social layers individuals must make when they reach a stipulated level of wealth (Nisab). This problem grows even more important as the market of Muslim goods2 [2] and Islamic finance expands in Russia [3-5].

1 Sukharev O.S. [Methodological principles of institutional analysis: The old and new schools and mainstream]. Finansovaya analitika: problemy i resheniya = Financial Analytics: Science and Experience, 2013, no. 41, pp. 7-24. (In Russ.)

2 Shovkhalov Sh.A., Petrova A.T. [The market of Muslim goods: Essence and Features]. Fundamental'nye issledovaniya = Fundamental Research, 2015, no. 6-1, pp. 207-210. (In Russ.)

The Islamic law sets forth about six principles governing the origination of the Zakat obligation. In this research, I focus on the most relevant to the Russian market.

1. A person should be a Muslim.

People, other than Muslims, are not subject to Zakat. This clause is applicable in case of a joint venture (a joint-stock company, limited liability company, etc.). Assessing the amount of Zakat, entities should take the property owned by a Muslim as the taxable base (stocks, shares in the authorized capital, etc.).

2. A person shall possess a certain amount of Nisab for over one lunary year (354/355 days).

Nisab is the value or quantity of the property that entails Zakat in case of its growth. According to the Shafi'i madhhab (school of law), the first date of profit-making operations is taken to assess Zakat, notwithstanding whether the property meets the Nisab criteria or not as at the given moment. For example, a sole proprietor assumes its business operations on January 1. He had five pairs of shoes to sell for RUB 10,000, i.e. below the Nisab level. However, if the property reaches the Nisab level in 354 days, starting from January 1, the sole proprietor must pay 2.5 percent on the value of all the goods. If an individual possesses 40 grams of gold as of January 1, but the gold possessions reach 85 gram only on June 1, that is, it exceeds Nisab, the individual is to pay 2.5 percent on 85 grams of gold in 354 days, starting from June 1, rather than January 1 (2.125 grams in monetary terms).

3. The property shall be obtained in the Shariah-permitted manner.

A legal entity accrues the income item Interests Receivable. This amount is not subject to Zakat, but shall be distributed to the poor population [6].

Thus, settling the key concepts of this subject area, I analyze proceedings by the Russian researches into Islamic taxes. They can be conditionally divided into proceedings by religious personalities [7, 8] and academic researches. The latter become the focal point of this research. These are:

- monograph, An Islamic Economic Model and Modern Times, by R.I. Bekkin (2010) [9];

- paper, Zakat: A Practical Guidance for Calculation, Payment and Distribution of Zakat, by M.E. Kalimullina, R.I. Bekkin (2009) [10];

- paper, Calculation of Zakat in Russia Based on Balance Sheet, by G.Kh. Koveshnikova, Sh.M. Abubekerov (2008) [11 ];

- handbook, Taxes and Taxation in Islamic Economies, by I.Yu. Zobova (2008)3.

It is noticeable that all the above papers were published within 2008 through 2010. I should also spotlight such authors as R.Yu. Pochekaev [12], N.A. L'vova and N.V. Pokrovskaya4.

In his monograph, An Islamic Economic Model and Modern Times, R.I. Bekkin scrutinizes the way Zakat is implemented, starting from the caliphate time and onward, in Yemen, Saudi Arabia, Pakistan, Libya, Sudan and Malaysia. The monograph was released in 2010 forerun by Bekkin's other proceedings [13-15]. In those proceedings, Bekkin articulated original ideas of Zakat. However, An Islamic Economic Model and Modern Times, represents an amplified and extended overview. I draw upon it in this research. The author reviews the Zakat practice in Russia and points out some issues relative to the subject:

- nonexistent culture of Zakat;

- prevailing public unawareness of Zakat;

- confusion of Zakat and alms;

- nonexistent centralized procedure for charging Zakat.

R.I. Bekkin notes that the collection and distribution of Zakat do not entail any amendments to the effective legislation, being an indisputable merit in comparison with other aspects of the Islamic economy. He also refers to the Republic of Karelia that successfully enforces the Zakat practices. However, he predicts the promising future for various charitable foundations. Despite an apparent excellence of the monograph, R.I. Bekkin fails to address the Zakat assessment method.

3 Zobova I.Yu. Nalogi i nalogooblozhenie v stranakh s Islamskoi ekonomikoi [Taxes and Taxation in Islamic Economies]. Kazan, TGGPU Publ., 2008, 148 p.

4 L'vova N.A., Pokrovskaya N.V. [Special features of Islamic taxation in the modern financial system]. Finansy ikredit = Finance and Credit, 2015, no. 8, pp. 31-40. (In Russ.)

In her paper, Taxes and Taxation in Islamic Economies (2008), I.Yu. Zobova, in fact, echoes the main conclusions made by R.I. Bekkin, without offering any new ideas.

The handbook, Zakat: A Practical Guidance (2009), became widespread owing to the renowned authors (M.E. Kallimulina, R.I. Bekkin). The authors approached the issue through the lens of classical proceedings on the Islamic law, i.e. the substance of Zakat as per the Koran and hadiths, its assessment and payment. They also express their ideas on the practical use of Zakat in Russia and some other countries. The first two chapters contain some aspects, which diverge with the Islamic law (Table 1).

The handbook does not provide any comprehensive technique for legal entities to assess Zakat.

In my opinion, the paper, Calculation of Zakat in Russia Based on Balance Sheet (2008), by G.Kh. Koveshnikova and Sh.M. Abubekerov became a real methodological breakthrough. Despite many attainments, I still have to note some discrepancies with the Islamic law (Table 2).

Basically, G.Kh. Koveshnikova and Sh. M. Abubekerov give a detailed view of balance sheet items in Russia collating them with Zakat. However, I highlight the most important aspects of the paper, besides the above ones:

- it lacks the Zakat assessment technique for legal entities, offering just several formulas;

- balance sheet underwent significant modifications

after 2011 as accounting practices developed in

Russia. Thus, the information got outdated to a certain extent.

A special mention shall be made concerning the article by N.A. L'vova and N.V. Pokrovskaya. Unlike the previous researches, they raise the question of a missing assessment technique, but still give way to some inaccuracies (Table 3).

Notwithstanding apparent omissions, N.A. L'vova and N.V. Pokrovskaya return to the importance of Islamic taxes, stating that respective studies might provide rather valuable findings to subsequently eliminate the economic disparity as mentioned in the opening idea of this research.

Hence, the above proceedings and their scholarly approaches may be classified into historical (for example, proceedings by R.I. Bekkin) and methodological (for example, proceedings by M.E. Kalimullina, G.Kh. Koveshnikov). In my opinion, the first group of proceedings makes rather uncontroversial conclusions, while significant fallacies were traced in the second one (Tables 1, 2 and 3) with respect to the Islamic tax assessment. They fail to present a comprehensive technique for legal entities to assess the tax. This fact shall motivate scholars for further researches, considering a growth in the Muslim population [16] and the market of Muslim goods and Islamic finance [17, 18].

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