Baitul Mal Case Study

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Learning Objectives

At the end of this topic, you are able to:

1. Understand the history background of Baitul Mal from the practice of Rasulullah SAW to the famous caliphs.
2. Understand about the traditional sources of revenue in Islamic state, zakat and modern taxation.
3. Able to determine the function of types of tax.
4. Differentiate between economic and social impact of zakat and taxation
5. Understand the rules and regulations govern the system of Zakat.

1.0 INTRODUCTION

This chapter provides an overview of Baitul Mal and then explains the history of Baitul fro the time of Prophet SAW until the famous Caliphs. Sources of state revenues covered in this chapter are Ghanimah, al-Fai’, al-Jizyah, Miscellaneous Sources, Ushr, Kharaj,
…show more content…
Thus, Baitul Mal institution independently formed as an economic institution in the era of Caliph Umar bin Al Khattab in regard of suggested by Walid bin Hisyam, who is an expert in Fiqh. Since then, Baitul Mal had become a vital institution in Islamic countries. Farther, Baitul Mal has handled a variety of matters ranging from withdrawal Zakat (also tax), ghanimah, infaq, sadaqah in order to construct public facilities such as roads, bridges, hire armies, and social or even public interest. Compare with today, Baitul Mal can be functioning as Ministry of Finance, Ministry of public works and many …show more content…
The central of Baitul Mal existed in the capital of the empire under the direct control of caliph, whereas the governor of the province controlled the provincial level the Baitul Mal. There were no commercial banks or central bank during at that time. It appears that all the requirements and needs of the government and the society used to be met by Baitul Mal which supervised public revenues and public expenditure, who will helped the poor and performed almost similar functions which the ministry of finance performs today. In additional to that, it is also performed the functions of a central bank except in issuing the currency, and controlling credit and utilizing interest rates as policy

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