Islamic Tax Law

The following excerpt is on Islamic Tax Law from unclassified despatch #169 from the American Consul in Aden in 1956. Howard Stovall found this in the archives of Baker, Mckenzie and Hightower in Chicago. This is reproduced as is (no corrections made).

The Yemen

"Taxation (Zakat) in the Mutawakiliyit Kingdom of Yemen is based to a considerable extent on the principles of taxation laid down by Islamic Jurisprudence (Al-Shari'a) thirteen hundred years ago. The government of Yemen relies on taxation as its major item of revenue. Therefore, it is necessary to review briefly the Islamic principles of taxation in order to compare it with the taxation systems in the Yemen since 1919 when the dynasty of Aal Hamid al-Din came to power.

"The Islamic Jurisprudence (Al-Shari'a) states that the Muslim taxpayer, provided that he live within the boundaries of a Muslim State, should pay an annual tax known as 'Zakat' which is calculated as follows:

  1. "2.5 percent on all valuable items such as money, gold, silver, jewels and other precious ornaments.
  2. "10 percent on all crops which can be stored for a long period such as wheat, millet, corn, dates, etc. This rate applies to any crop which is grown without artificial irrigation.
  3. "5 percent on all crops which are grown with artificial means of irrigation.

Animal Tax

  1. "One male camel for every thirty male camels and one female camel for every forty female camels or one goat for every five camels.
  2. "One ox for every thirty oxen and one cow for every forty cows.
  3. "One goat for every forty goats.

"The payment of this tax (Zakat) is not only a civic responsibility, but it is also a religious duty which must be fulfilled by every Muslim. The Muslim who willfully avoids the payment of this tax is violating one of the principles of Islamic Jurisprudence (Al-Shari'a) and is liable to prosecution and the confiscation of one half of his property for public use.

"The Muslim taxpayer has to pay the tax (Zakat) on wealth that he possesses regardless of whether or not he derives income from such wealth. Hence, the person is obligated to use his capital productively otherwise his wealth will be diminished gradually by payment of the tax (Zakat) every year.

"There are certain conditions attached to the regulations of the tax (Zakat) regarding the assessment of the tax, exempted persons and payment of the tax. The regulations state that:

  1. "The Muslim State should not undertake the assessment process because the taxpayer himself should discharge this religious duty to the complete satisfaction of his own conscience. If there is evidence of any serious misuse of the privilege, however, the Government has the right to assess the tax.
  2. "The poor people, those whose lands do not yield more than what they consume, are exempted from the payment of the tax (Zakat). Non-Muslims are also exempted, although a very small amount of money is imposed on the male adults for their protection since they are not recruited in the army to defend the country in the event of war. The Government of Yemen levies 2 Maria Theresa dollar (also called Riyals) on every poor non-Muslim and 4 MT dollars on every rich non-Muslim every year.
  3. "The payment of the tax (Zakat) should be made only to a Muslim State and if the Muslim taxpayer lives in a non-Muslim State he should not pay the Zakat to the Government, which collects other types of taxes. In that case, he should pay the (Zakat) tax directly to the poor or to religious, social and educated organizations.

How tax (Zakat) is collected in the Yemen

"The Government of Yemen has introduced a system of State Assessment and is accused of violating the Islamic principles of leaving the assessment of tax (Zakat) to the taxpayer. The Imam's Government has applied this in a partial manner which has increased the sectarian dispute between Yemen's two major sects, Zaidis and Shafa'is. The Imam gave the taxpayer in the north of Yemen, which is densely populated by the Zaidi sect to which the Imam belongs, the right to assess the tax (Zakat) and denied this right to the Shafa'is, who live in the southern regions and the coastal strip known as the Tihama, where the assessment is carried out by the Government.

"The collection of all forms of taxes is controlled by a body called the 'State Revenue Committee' which functions under the Imam's supervision. The keeps all accounts of taxes, collects taxes from the tax collectors and pays to Imam's treasury the money thus received. The tax collector (Ma'mir), who is not in the permanent service of the Government, is appointed to assess tax in certain district and proceeds to the area a few weeks prior to the harvest season,. He examines each farm and assess the yield on the highest possible basis in order to please his superiors and guarantee a similar assignment next year. Under Shari'a Law the amount of (Zakat) tax should be 10% or 5% of the value crops, however, under the system used in the Yemen the tax collector (Ma'mir) assess more than the prescribed figures. He taxes the crop production as follows:

  1. "10% on the crops grown without artificial means, i.e. irrigation, and 5% on those grown with artificial means.
  2. "For charity, education and hostages, an additional amount of 3% of the assessed tax.
  3. "Fee to be paid to the tax collector (Ma'mir) and his staff as wages for the services rendered to the Government.

Animal Tax

"When the assessment of tax (Zakat) on land products is completed the tax collector then undertakes the assessment of tax (Zakat) on animals, which is quite different from the principles of Islamic Jurisprudence (Al-Shari'a). The Islamic Jurisprudence states that the tax (zakat) must be paid in kind. For instance, if a person owns crops the tax (Zakat) must be paid in crops and if he owns animals the tax must be paid in animals. But the Government of the Yemen has violated this principle and is levying a monetary tax on animals and sometimes on crops. The animal tax is calculated as follows:

  1. "2.5 Buqshas on every goat
  2. "10 Buqshas on every cow
  3. "1 MT dollar (riyal) on every camel used for purposes other than commercial transport
  4. "2.5 MT dollar (riyals) on every camel used for commercial transport.

(Note: 40 Buqshas = 1 MT dollar = U.S. $0.75 approximately).

"After the completion of assessment in a district the tax collector (Ma'mir) submits a statement to the State Revenue Committee. The Committee does not accept the figures if they do not favorably compare with those of the previous years and may order a complete reassessment. Then the process of tax collection begins. The process is called 'Tanafidh', an indirect tax imposed on the people of Yemen. 'Tanafidh' is derived from the Arabic word 'Tanfidh' which means execution of a command. In the Yemen it means the billeting of soldiers in the houses of farmers to expedite payment of taxes and outstanding duties. The farmer is supposed to provide accommodation and food for the soldier who stays in his house until the taxes are settled. He also pays wages to the soldier for the number of days which he stayed in the farmer's house.

"The other system of indirect tax is called 'Khitat' which means compulsory messing services and accommodations provided for troops. This system was put into force 30 years ago by the late Imam Yahya bin Hamid al-Din, father of the present Imam Ahmad. When Imam Yahya was proclaimed King of the Yemen he wanted to recruit an army to invade the Aden Protectorate States, bring them under his control and drive the British from the Colony of Aden. Therefore, in his guerrilla warfare against the Ottomans, and asked them to be ready for 'Al-Jihad', the religious war. Most of the Zaidi tribesmen responded. The Imam then issued a decree to all people requesting them to accommodate and feed the troops whenever they passed through any village or town. If the people of any village or town fail to fulfill the requirements of the soldiers, they are considered outlaws to be punished.

"But when the present Imam Ahmad succeeded to the throne after the assassination of his father by the Free Yemenis in 1948, he made a certain modification of the 'Khitat'. The system remains as it was except that the troops have to provide the food stuffs and the people do the cooking.

Customs Duties

"In addition to the land and animal taxes (Zakat) the Government levies customs duties on commodities imported and exported from the country. The duties are collected as follows:


  1. "10 per cent on major items of foodstuffs and clothes, to which is added for every MT dollar collected 4 Buqshas levied as a 'Social Services Surtax' and utilized as follows: 2 Buqshas for education, 1 Buqsha for charity and 1 Buqsha for hostages.
  2. "20 per cent on major items of food stuffs and clothes, to 'Social Services Surtax' on each Riyal collected.
  3. "10 per cent on currency imported to the country plus the 4 Buqshas surtax.


"Coffee - This is the Yemen's most valuable export and the duty of 1.5 Riyals per Frasila (approximately 23 pounds) is payable in the United Sates dollars to the credit of the Yemen Government in a New York bank at the official exchange rate of 1.25 Riyals to the $U.S. 1.00.

"Skins - Duty of 1.25 Riyals per twenty skins.

"Almonds - Duty of 2 Riyals per Frasila (exported in small quantities).

"Carpets - Duty of 10 per cent of the cost price. (Yemeni carpets are used as bet covers and turbans).

"Raisins - Duty of .5 Riyal per Frasila (exported in small quantities).

Road Tax

"18 Riyals are levied on every cargo truck, whether laden or empty, plus the 4 Buqshas surtax.

"9 Riyals are levied on every passenger vehicle plus the 4 Buqshas surtax. The tax is paid whether the vehicle is carrying passengers or not.

"9 Riyals are levied on every private car plus the 4 Buqshas surtax."

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