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By Siti Alya Nadiah Ismail
KUALA LUMPUR, Sept 22 (Bernama) – Paying zakat is an important pillar of Islam that Muslims who meet the criteria are required to fulfil and it is usual for zakat to be paid on income and property.
However, paying zakat on the gold owned by individuals for their own use or investment purposes is not widely practised.
Allah SWT’s command regarding the payment of zakat on high-value assets is clearly outlined in Surah At-Taubah, namely verses 34 and 35 which state that “tidings of a painful punishment” await those who hoard gold and silver and do not spend them in the way of Allah.
LEVEL OF UNDERSTANDING
Gold is considered a safe asset by most investors as its value remains stable even in times of geopolitical strife, unlike other commodities that are at risk of facing extreme price fluctuations.
As such, more and more Muslims in this country are turning to gold as an investment, whether in the form of shares, ornaments or physical gold products such as coins. But what is the extent of their understanding of the payment of tithes for gold?
In the case of housewife Siti Hidayah Zulkifli, 25, she was exposed to gold investments since her childhood as her mother often bought gold ornaments which she kept safely for their use.
Siti Hidayah also had early exposure to the method of calculating the zakat payment on gold, for both the gold jewellery owned by her mother and her parents’ investments in gold.
“Zakat payment on gold ornaments must be made when the weight of gold (owned by an individual) reaches or exceeds the nisab (Arabic word for minimum amount/weight) of 800 grammes (as in the case of the Federal Territory of Kuala Lumpur) and exceeds a 12-month period of ownership.
“If the gold jewellery exceeds the (prescribed) minimum gold weight, the owner must pay zakat at a rate of 2.5 percent of the prevailing gold price and weight of the gold in his/her possession,” she told Bernama.
As for investments in physical gold items such as coins, bars and wafers, zakat must be paid once their minimum weight attains 85 grammes.
Physical gold investor Suzanna Ismail, 42, said she has the date of purchase of all the gold bars in her possession, which makes it easier for her to remember when to pay the zakat annually.
“If the gold (for investment purposes) has been in our possession for a year and its nisab value is 85 grammes, this means we have to pay zakat. I started paying zakat for my gold bars in December 2021,” said the Malaysian Armed Forces officer.
“Other people won’t know whether I’m paying zakat or not but I make it a point to pay zakat to show my gratitude for the blessings bestowed on me by Allah. We must share our blessings with others.”
WHAT ABOUT GOLD ORNAMENTS?
Do purchases of gold jewellery for personal use entail zakat payments? The understanding among some Muslims is that such items are exempted from zakat as long as they are worn regularly by the owner.
Commenting on this, senior manager of the Syariah and International Unit of the Zakat Collection Centre at the Federal Territories Islamic Religious Council (PPZ-MAIWP), Ahmad Husni Abdul Rahman, said scholars were of the view that gold ornaments purchased for the owner to wear are basically not subject to zakat payment even though such possessions are considered mal zakawi (type of wealth on which zakat can be imposed).
However, when the trend of buying more jewellery than one can possibly wear emerged, the Mazhab Al-Shafie or Shafie school of thought set a benchmark for the payment of zakat on gold ornaments.
“Once the gold ornaments owned by a person attain (or exceed) a certain nisab, then they will have to pay zakat because the jewellery they own is in excess of what they would need.
“It’s not fair for us to keep our possessions all to ourselves when there are needy people out there. That’s why a rate (nisab or minimum weight) was set. In the Federal Territory (of Kuala Lumpur) and Selangor, the rate is 800 grammes. This rate was not fixed arbitrarily but only after carrying out a study on the ownership of gold ornaments in KL and Selangor,” he explained.
ZAKAT PAYMENTS ON GOLD GOING UP
According to Ahmad Husni, the number of people paying zakat on gold in Kuala Lumpur and Selangor is on the rise, indicating an improvement in the level of understanding among Muslims of this obligation.
He said during the peak of the COVID-19 pandemic in 2020 and 2021, PPZ-MAIWP had expected a decline in zakat payments as many people had lost their jobs then but, on the contrary, there was an increase in zakat payments on gold.
“In fact, our collection during the pandemic was the highest we have ever achieved. This shows that although many people were affected (by the pandemic), the calamity that struck us also brought blessings.
“Perhaps, people became more aware of their obligations and got closer to their Creator… maybe due to that awareness, more people came forward to pay their zakat and help those worse off than them,” he added.
SETTLE GOLD ZAKAT PAYMENTS
Ahmad Husni also pointed out that Muslims who have never paid zakat for gold on the grounds that they were ignorant of the matter should proceed to do so once they realise their obligation.
“If we are not able to pray or fast, we make up for it later. The same thing goes for the zakat ritual. If we fail to fulfil our obligation (to pay the gold zakat at the rightful time), then it (payment) has to be replaced.
“However, the replacement is based on the (period of) time the obligation was not heeded (payment is based on the prevailing rate at that time)… (the payment) is not doubled and neither will a penalty be imposed,” he explained.
He added that the same concept applies when children, who inherit their parents’ gold assets upon their demise, find out that no zakat payments were ever made for the valuables concerned.
“The main thing to do before distributing the gold to the rightful heirs is settling the zakat payment. As long as a person does not know (about gold zakat), he has not committed a sin but once he knows about it, the payment must be made as soon as possible,” he said.
FACILITIES AT PPZ-MAIWP
PPZ-MAIWP provides various channels to facilitate the payment of zakat. The payments can be done at counters or via Internet banking, PPZ-MAIWP portal, salary deductions and e-wallet.
MAIWP, meanwhile, has implemented a campaign called Kempen Zakat Emas in collaboration with HABIB Jewels.
The campaign is aimed at raising awareness of zakat payments on gold, especially among HABIB’s customers.
As part of the campaign, themed ‘Permata Firdausi’, HABIB is offering special prizes in the form of cash vouchers of up to RM10,000 in value and 10 limited edition gold wafer coins to lucky customers who make their gold zakat payments at PPZ-MAIWP from Sept 1 to 30, 2022.
“We are also encouraging people to pay zakat on gold through our campaign in the mass media and sermons delivered in mosques and surau.
“When we implement a specific campaign, we will mobilise the entire machinery at PPZ, whether it is for marketing, preaching, activities and answering questions,” he said, adding that PPZ-MAIWP has also prepared posters on the gold zakat to be distributed through social media, and engaging with influencers as well.
Translated by Rema Nambiar
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