Zakat Base Addition

Application of Zakat Collection in the Kingdom of Saudi Arabia The collection of Zakat and its disbursement to those entitled is one of the basic tasks of the State, as stipulated in the Basic Law of Governance in Article 21, which states that Zakat shall be collected and disbursed in its Sharia-prescribed channels. Article 7 further affirms the State’s commitment to Sharia obligations, including the collection and distribution of Zakat, stating that the government in Saudi Arabia derives its authority from the Holy Qur’an and the Prophet’s Sunnah, which govern all laws of the State. In confirmation of this, during the reign of the Founder King Abdul-Aziz—may Allah have mercy on him—Royal Decree No. (17/2/28/8634) dated 29 Jumada Al-Awwal 1370 AH, corresponding to 6 April 1951 AD, was issued ordering the collection of Zakat. This decree was followed by several royal decrees and ministerial resolutions reinforcing it, along with regulations and circulars explaining and clarifying its implementation. These include Royal Decree No. (M/40) dated 2 Rajab 1405 AH, the Implementing Regulations for Zakat Collection issued by Ministerial Resolution No. (2082) dated 1 Jumada Al-Thani 1438 AH (28 February 2017 AD), and Ministerial Resolution No. (2216) dated 7 Rajab 1440 AH (14 March 2019 AD), which applies to Zakat years beginning on or after 1 January 2019 for all Zakat payers, except those assessed under the arbitrary method as per the fourth section of the regulations, for whom it applies to declarations submitted after 31 December 2019. Additionally, the Implementing Regulation for Zakat Collection issued by the Minister of Finance under Resolution No. (1007) dated 19 Sha’ban 1445 AH (29 February 2024) applies to fiscal years beginning on or after 1 January 2024 for all Zakat payers. The Implementing Regulation for Zakat Collection has been concerned with clarifying the provisions for levying commercial activities in general and has also elucidated the provisions for specific activities and cases. Moreover, the Regulation has encompassed the procedures for Zakat collection, as well as the rights and obligations of Zakat payers. The Zakat proceeds collected by ZATCA are received and deposited in the Social Security Account, which is responsible for disbursement to the poor and needy in accordance with Royal Decree No. (61) Dated 05 Muharram 1383 AH corresponding to (May 28, 1963 AD), wherein Paragraph (1) provides for: “Zakat shall be collected in full from all joint stock companies, and others, and individuals who are subject to Zakat.” In addition, Paragraph (2) stipulates: “All amounts collected shall be returned to the Social Security Fund.” Legislative Hierarchy of Zakat Royal Decree dated 29/6/1370 H. The implementing regulations of the Royal Decree (M/40) Ministerial Resolution No. (394) dated 7/8/1370 H. Royal Decree No. (M/40) dated 2/7/1405 H. which mandates the collection of Zakat from Saudi nationals were issued under Ministerial Resolution No. (2082) dated 11/6/1438 H. to establish the Authority as a governmental body which included the order to collect Zakat in full from all companies, institutions and other organizations as well as individuals who are subject to Zakat. Ministerial Resolution No. (1007) dated 19 Sha'ban 1445H, By Ministerial Resolution No. (2216) dated 7/7/1440 H. regarding the issuance of the implementing Regulations for Zakat Collection, which shall apply to Zakat years starting on or after January 1, 2024. the implementing regulations for Zakat collection were issued applicable from 1 January 2019