ISLAM FINANCE AND GOVERNMENT REVENUE

1. SOURCES OF ISLAMIC GOVERNMENT RESOURCES

1.1. GHANIMAH - Wealth taken by force from an enemy in times of war. There were considerable differences among the classical jurists concerning rights to, and possession of, such wealth.

1.2. JIZYAH - Tax imposed to non muslim in lieu of the gurantee given to them for protection. Responsibility of an Islamic government to protect the lives and properties of the non muslim in the same manner as they protect their muslim citizen.

1.3. ZAKAT - It is the prime source of revenue for an Islamic economy. Payments of zakat is a religious duty and forms one of the pillars in Islam.

1.4. WAKAF -A property donation by an individual for the use of less fortunate Muslims, such as orphans and the poor. This usually entails a donation of a building or a plot of land, or an amount of money, to Muslims with no intentions of reclaiming the assets.

1.5. KHARAJ -The tax on land or agricultural land owned by a non-Muslim in the Islamic state. The tax rate will largely depend on certain factors, such as the quality of the land, fertility and irrigation requirements.

1.6. USHUR -The revenue collected from trade and business carried out by all citizens of the Islamic state, regardless of their religion and beliefs. This revenue will go to Baitulmal.

1.7. AL-FAI - Source of revenus refer to the property or wealth that is surrendered by non belivers at war but done so without fighting. Example, property will go to the Baitulmal.

2. ISLAMIC FINANCIAL PRODUCTS

2.1. IJARAH - Leasing is an agreemenent that permits one party (the lessee) to use an asset or property owned by another party (the lessor) for an agreed-upon price over a fixed period of time. it is a form of asset finance which has the benefit of using asstes without the requirement of ownership.the lessee acquires the asset he needs without borrowing on interest and receives the benefits of use while the lessor receives the value of regular rental payments for a specified period plus the residual value of the asset

2.2. MUSHARAKAH - Musharakah is a joint enterprise or partnership structure in islamic finance in which partners share in the profits and losses of an enterprise. Musharakah allows for the financier of a project or company to achieve a return in the form of a portion of the actual profits earned according to predetermined ratio.

2.3. MUDARABAH - is a contractual relationship executed between two partie, one supplying the capital (rabbulmal) and the other supplying the labor and skill as agent or manager, for investing in a pre-determined activity, which grants each party a share of the earnings as determined at the time of the investment

2.4. BAI BITHAMAN AJIL (BBA) house financing - is an islamic financing concept refers to the sale of assets or goods on deferred payments at a fixed price that includes profit margin to the seller. This concept is commonly use in property or asset financing .

2.5. AL-WADIAH YAD AL-AMANAH - is an act of trust, where the trustee (bank) will be given the rights to keep the money of the depositor in his safe custody. the depositor are given clear and understandable information about the contract