Debt and credit have different meanings. However, some people still think they are the same thing. Debt is money that we borrow from others, we are obliged to pay the debt. Meanwhile, receivables are money that we lend to other people, we have the right to collect the receivables from the borrower. Then, the question arises about zakaah on wealth. Is every Muslim also obliged to pay this zakat? Because, receivables are our property, which we lend to others.
Zakat on Receivables
A Muslim who has reached puberty is obliged to pay zakat. This is in accordance with the third pillar of Islam. In Islamic law, there are three types of zakat: zakat fitrah, zakat mal (wealth), and zakat on income. Now, zakat on receivables is included in zakat mal or zakat on wealth. This is because receivables are part of the wealth that we own and lend to others.
When it comes to the ruling on zakaah on receivables, scholars have differing opinions. Is it obligatory for the owner of the receivable, the person who owes it, or is there no obligation to pay zakat at all?
Read also: Types of Zakat in Islamic Law
In mal zakaah, it is stipulated that the wealth we have will be subject to zakaah when the amount is equal to the value of 85 grams of gold within one year. However, what if some of that wealth is in the hands of someone else, or in other words, it is a receivable? In this case, there are various opinions from Islamic jurists, among others:
Imam Malik’s opinion
Imam Malik was of the view that receivables that are under the control and control of another person are not subject to zakaah. However, receivables that are not required are only for receivables that are ghairu marju al-ada or the debtor makes it difficult or delays paying off the debt.
According to Imam Malik, receivable property is property that is in the hands and under the authority of another person, not in the hands or authority of the owner. In other words, the owner of the property cannot use, manage, or transact the property, because the property is being used by someone else. According to Imam Malik, this type of property is not included in the status of al-milk al-tam (perfect ownership).
On the other hand, if the receivable is marju al-ada’ or the debtor is trying to repay the debt, then this type of receivable is subject to zakaah when the debtor receives the property back. However, zakaah on these receivables must only be paid once, even if the property has been in the hands of another person for a long time. This is confirmed by Imam Malik in his book al-Muwattha’:
“…and if the receivable is in the possession of the debtor for a number of years, then the owner of the receivable receives the receivable, then he is only required to pay zakaah on it once.”
This is based on a hadith of the Prophet (peace and blessings of Allaah be upon him) narrated by his Companions:
“Narrated Zayd ibn al-Hubab, from ‘Abdullah ibn al-Muammal, from Ibn Abi Mulaikah, from ‘Aishah, who said: ‘Zakaah is not due on it (the receivable) until he grasps it’.”
Ibn Hazm’s opinion
Ibn Hazm is of the view that the receivables or assets that we lend to others are not subject to zakaah, either on the part of the owner of the receivables or the debtor.
Imam Shafi’i’s opinion
Imam Shafi’i is of the opinion that the receivables that we have must be paid zakat every year. This is because, according to Imam Shafi’i, receivables that are in the hands of others still have the status of al-milk al-tam. Because in essence, the property belongs to the debtor, even though the property is not in his grasp, and will be returned to him.
Imam Shafi’i emphasized this in al-Umm, Chapter I. In this regard, Imam Shafi’i relied on the Qur’anic verse which reads:
“Take zakat from some of their wealth, with which you cleanse and purify them and pray for them.” (Q.S. Al-Taubah: 103).
Opinion of some other scholars
Some other scholars divided the ruling on zakaah on receivables into two categories. Namely, receivables that may be liquidated and receivables that may not be liquidated. For receivables that may be liquid, the scholars are of the opinion that zakaah must be paid along with other assets. As for receivables that are unlikely to be liquid, the scholars differ on the ruling of zakaah.
- Accounts receivable are subject to zakaah if they are disbursed over a period of time that has passed in its entirety. For example, if the receivable is delayed by two years, then it is zakaah twice when it is disbursed.
- A receivable is subject to zakaah when it is disbursed, for one year only, even if several years have passed.
- Receivables are not subject to zakaah for a period that has passed. According to the Hanafiyyah, the newly received receivables or assets start a new haul.
Based on these three opinions, some contemporary scholars favor the second opinion. If the receivable has passed through several years, the owner of the receivable should only do zakaah on the year that has passed. However, there is certainly room for difference of opinion on this issue, considering that in the past there was no detailed discussion on this matter. Wallahua’lam…
(RQA)