Zakat is absolutely different from tax which is imposed by the Govt. the main differences are as under
The payment of Zakat is a religious duty whereas the payment of tax is a national duty.
Zakat is imposed only on the muslim members of the society whereas tax is imposed on all the citizens in proportion to their ability to pay.
Zakat is a compulsory payment which is not remitted by anyone whereas tax though compulsory payment, yet is remittable by the Govt.
In case of Zakat, the rates of Zakat payment are fixed by the Holy Quran and cannot be changed by anyone whereas, in case of tax, the rates can be changed by the govt. from time to time.
Zakat can be paid individually whereas tax is collected only by the Govt.
The beneficiaries of Zakat have been clearly pointed out in the holy Quran and Zakat can not be spent by the govt. on other than beneficiaries anywhere.
Nisab of Zakat is fixed by the holy Quran wheras taxable income varies from time to time.
Zakat is payable after the completion of one year whereas it is nto necessary for tax. Its period may be less or more than one year.
Zakat is imposed on all types of goods even animals , gold and silver etc. held by the individual , whereas tax is imposed only on the income earned by various sources.
The objective of the payment of Zakat is the pleasure of Almighty Allah through financial assistance of the poor and needy whereas the objective of tax is to meet the development and non development expenditures of the society , as a whole.
Zakat purifies the wealth , whereas tax does not serve this purpose.
Zakat is non variable whereas the tax is usually progressive.
Zakat creates the feelings of being a member of muslim society irrespective to regional limits whereas tax creates the feelings of being a member of just single society. Thus Zakat creates universal feelings while tax creates native feelings.
Tax payers expect to avail some specific facilities from the govt. against the payment of tax whereas Zakat payer does not expect to get any type of specific facility or material gain.
15. Regional limits:
Tax can be utilized just in that region from where it has been collected whereas , if the amount of Zakat is more than the needs of one region it can be spent on any other region of the world.
16. Ability to pay:
Zakat is imposed just on those who have the ability to pay it whereas tax , particularly in the case of indirect taxes can be imposed on those who have not the ability to pay.
In the collection and distribution of Zakat, there is no corruption whereas a lot of corruption is observed in the collection of tax.
Keeping in view the above whole discussion on the topic of Zakat, we reach to the conclusion that Zakat is one of the five pillars of Islam. It is the main tool of fiscal policy of an Islamic state. It provides financial assistance to poor persons, raises the aggregate growth of the economy, plays a vital role to stabilize all the fiscal variables and make the country prosperous.