Is there zakah on trade goods? If so, how is it calculated, and what is the value of the nisab in them?

The questioner : Sometimes the brothers, I mean, they ask questions to Shaykh Nasser, may Allah reward him with good.

Another questioner : Take your time.

The Shaykh : Welcome.

The questioner : May Allah bless you. In the name of Allah, and may the prayers and peace be upon the Messenger of Allah. In truth, this question concerns the matter of zakah, specifically zakah on wealth or zakah on trade goods. This is a thorny issue; generally, we stop at the limits of what we cannot find solutions for, such as: what is the nisab? Or how is it paid out? Or what is the value or percentage that is paid out from these goods?

The Shaykh: Yes.

The questioner : Especially since you know, O Shaykh, that there are many types of trade goods in these times and eras, such as merchandise, fabrics, cars, parts, and so on. In truth, we do not know what their nisab is, or what the percentage of zakah is that is paid out from them, if there is any zakah due on them.

The Shaykh: Yes.

The questioner : This is the first question, so that we may hear its answer, because there have been many answers given on it.

The Shaykh: Yes.

The questioner : May Allah reward you with good.

The Shaykh : Before answering, I say: It is obligatory for every Muslim, whether he is a questioner or an answerer, to understand that the rulings of the Shari'ah are acts of worship for which Allah (Mighty and Majestic) has burdened His servants for the benefit of their religion and their worldly affairs. This obligation does not necessarily have to align with the intellect or logic of every Muslim, let alone a disbeliever. The obligations of the Shari'ah do not necessarily have to align with the intellect of every Muslim, let alone the intellect of a disbeliever. I say this because there are matters that scholars are certain about regarding which there is no zakah, so a Muslim should not ask, "Why is there no zakah on this type, while there is zakah on the other type?" Because we have known the answer from this introduction. Yes, may Allah guide them. The people of the house, do they not understand? They should reflect with the people; the introduction is clear, I think.

The questioner: Yes.

The Shaykh : Now, as for the answer to the question regarding zakah on trade goods, I say: The scholars have two opinions on trade goods. The first is the opinion of the majority (al-jumhur) that zakah is due on them, and its zakah is by appraising them and estimating their value at the end of every year, such that they are converted into a monetary value, and consequently, 2.5% is paid out from them, as is the case with gold and silver. This is the first school of thought, and we do not adopt it. The other school of thought is that there is no zakah on them. The negation intended here is what the first group affirmed, meaning the quantified zakah, which is said to require appraising them at the end of the year and paying out 2.5%. This is what is negated. However, this does not negate the obligation of zakah on every wealth, especially if it has value and effectiveness. The second opinion does not negate that an absolute zakah is obligatory on these assets. The meaning of absolute zakah is that the owner of that wealth does not need to pay out a specific quantity, because the Shari'ah has not specified it, such as the saying of Allah the Exalted: "And give its zakah on the day of its harvest."

The questioner : .

The Shaykh : , so His saying (Mighty and Majestic): is an absolute text. The right of the wealth is that you pay out from it what your soul is generous with, and it is willing and not coerced. This is undoubtedly what the soul is generous with in an absolute sense. Then it differs from one rich person to another, from one generous person to a miser to a stingy person. But it is necessary to pay out such that it clears his conscience, based on the saying of the Prophet (peace and blessings be upon him) in the authentic hadith: ; so he pays out what his soul is generous with, and his soul is pleased with it. Then there is no hawl (lunar year of possession), there is no hawl, there is no hawl. It is understood from this answer that he pays out from the wealth itself, meaning there is no obligation to convert it into cash. And you, as a merchant, know the types of trade, their forms and colors, and so on. So every rich person of this type of wealth must purify his wealth with what his soul is generous with. This is the ease that Allah (Mighty and Majestic) has provided for His wealthy servants whose money has been converted into trade. He does not say to them, "Convert the theoretical value of this trade into cash and then pay out 2.5% at the end of every year." He does not say this to them. So He left the way open for them to pay out from the merchandise they have, from the item itself, what their souls are pleased with.