Islamic taxation

Islamic taxation, primarily governed by Sharia law, comprises various obligations to promote social justice and community welfare. The most prominent form is Zakat, a mandatory almsgiving calculated as a percentage of one’s savings, typically 2.5% of wealth above a certain threshold, aimed at supporting the needy. Khums, another type, involves a 20% tax on surplus income after expenses. Additionally, Islamic finance values ethical investing and prohibits interest (usury). Overall, Islamic taxation fosters economic equity, supports charitable causes, and helps in redistributing wealth within the community.