Ṣukūk in its contemporary form as a financial instrument has gained prominence only over the last one to two decades. Like a share, a ṣukūk is defined as an instrument representing undivided ownership over the underlying assets. Naturally, the question arises whether ṣukūk are subject to the same zakat rulings as shares. Accordingly, this research has identified the similarities between shares and ṣukūk. The zakat rulings applicable to shares are also identified, and the research has made an attempt to apply those rulings in the context of ṣukūk. However, the research has identified the peculiarities of ṣukūk as it is currently practiced in the global market and provided fresh insights on how these may impact the applicability of zakat to ṣukūk.
While the research includes theoretical Sharīʿah analysis and discussion on various relevant zakat matters, it also reviews today’s practices. Accordingly, relevant Sharīʿah standards and requirements of various jurisdictions are identified, and several ṣukūk prospectuses are examined in relation to zakat calculation and disclosures. By this the research aims at enabling a coherent understanding of the theory and practice.
The research has adopted a qualitative method for content analysis. The materials analysed are primary and secondary sources of the Sharīʿah and relevant contemporary materials on the calculation of zakat on shares and ṣukūk. Topping the list of contemporary materials are the resolutions issued by the International Islamic Fiqh Academy of the Organization of Islamic Cooperation (IIFA) and other fatwa bodies like Kuwait Finance House, Kuwait Zakat House, etc. The relevant Sharīʿah standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) are also examined. The research has, moreover, investigated the industry practices and assessed the disclosures in light of the relevant laws and regulations in addition to a sample of 40 ṣukūk prospectuses from 11 countries and one multilateral organization...
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