Q2: Write a short note on early caliphate revenue system and taxes.

 Q2: Write a short note on  early caliphate revenue system and taxes.

By the time Muhammad died in 632 AD in Medina, The size of “Umma” was already big enough. To finance the growing needs of a state and its stakeholders the Umma had to create regular source of income. Moreover the need for a separate department was there to handle the continuous inflow of large amount of money from expeditions.

Muhammad and his immediate successor Abu Bakr kept themselves busy in continuous wars and the chief source of income was bounty. During Umar and Uthman, economic reforms shaped the revenue system of caliphate and new taxes, treasury, revenue and finance officials, monetary system gradually developed.

The central treasury or Bait-ul-maal had four major source of income namely

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Jazia – Tax on non – Muslim subjects in exchange they can practice their rituals and they were called “dhimmi”

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Zakat – Alms giving. 2.5% of accumulated wealth of a person should go to religious works. State collected the tax to fund public welfare works.

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Khums – Bounty during wars

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Kharaj – Irrigation or land tax. ½ to 1/5 of the total production. 1/10 on State supported land .

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Usra – Agriculture or land tax on Muslims.

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