If the conquered land was barren, then the Khalifah could distribute or allocate it to whomever he chose, on lease, or for other taxes, or use it for any other purpose that he deemed beneficial for all. If it was given as a gift to someone then that person paid 'ushr, kharaj or a greater tax as the Khalifah may fix. This is explained in Diagram 4.

Diagram 4 refers to those lands that were acquired by someone as a gift from the state, such as lands that had no heir, conquered lands, barren lands, sawad lands, etcetera, or such lands acquired through cultivation, for example, by reviving barren land.

If such lands were from Arab land, then the new owner paid only 'ushr. If it was situated outside Arab land but not originally a kharaj land, then the owner also paid 'ushr. In cases where it was originally a kharaj land, then three situations could occur:

1. If the new owner irrigated the land by wells built by the polytheists or by water from a kharaj river or by water from canals owned by non-Arabs, then he paid kharaj on it, just as was the case with the territories of Iraq. (Yahya's recorded tradition no. 4014 confirms this.) If the person revived a barren land then he also paid kharaj on it.

2. However, if the new owner irrigated the acquired kharaj land by self-built well or spring, then he paid 'ushr.

3. The third category was a charge that could be determined by the Khalifah according to what the land could bear.Now let us compare their writings issue by issue:

On What Comprises 'Ushr Land

On what comprises 'ushr land, Qudama gives six categories:

1. Land of those who have accepted Islam.

2. Land revived by Muslims from barren land.

3. Conquered land distributed among those who captured it.

4. Land given as gifts to Muslims by the state.

5. Land possessed by Muslims from state lands of al-Sawad, previously owned by the Persian kings and their families.

6. Land abandoned by enemies and which are in the possession of Muslims. From Diagram 3 it is clear that the above six categories are implied in Abu Yusuf 's work.

'Anwa Land

On 'anwa or conquered land, Qudama tells us that 1/5th is retained by the state and only%th is distributed among those who captured it; or the Khalifah may retain it as a trust for all Muslims. What is implied here is that the Imam has absolute power to decide on this matter. Abu Yusuf also mentions this power and Yahya cites a few traditions that support Qudama's view. For example, his recorded tradition No. 1016 states:

"If the Imam so wishes, he deducts the fifth part and allots four fifths; and if he so wishes, he may turn it into fai' as was done by Umar al-Khatab in al-Sawad".

Of Dhimmis Embracing Islam

If a conquered person embraced Islam, Abu Yusuf stated that his property would remain with him and he had to pay the 'ushr. However, Qudama stated that kharaj would still be levied upon him. Yahya quoted a hadith that stated that in such circumstances, the kharaj would be lifted unless the person came from a region that paid jizyah and kharaj. In this case, only the jizyah was lifted while the kharaj would be due.

On What is Kharaj Land

On what is kharaj land, Qudama quoted Yahya that it comprised both 'anwa and sulk lands. Yahya added that land irrigated by kharaj river was also subject to kharaj. Abu Yusuf concurred with all the above.

On Reviving Barren Land

Abu Yusuf stated that one who revived a barren land owned the land. For example, if someone excavated a canal and cultivated a barren land, he would become the owner of the land. Qudama held the same opinion. Yahya cited a few traditions that supported that the revival should be with the permission of the Imam. This opinion is the same as Abu Hanifa's. Abu Yusuf did not feel that such a permission was necessary.

Tax on Revived Land

Abu Yusuf stated that if the barren land was irrigated from kharaj river, then kharaj was charged. But if irrigated by self-excavated spring, then 'ushr was charged. Qudama was also of the same opinion.

On the Rate of 'Ushr

Abu Yusuf stated that a self-irrigated land by methods such as using animals, wheels or canals would pay an 'ushr of 1/20 while for a non-irrigated one, an 'ushr of 1/10 was charged. Qudama stated the same. Some traditions in Yahya's collection also confirm this.

On Nisab and Kind from Which Taxation is Taken

On this issue there appears to be some controversy. Abu Yusuf stated that the nisab was five awsaq and no levy was imposed for an amount less than five awsaq. Qudama gave a similar opinion. Yahya produced some traditions that supported this opinion. However, Abu Hanifa was in disagreement in his opinion, there was no minimum limit, that is, the 'ushr was paid on whatever amount was harvested, even a handful.

On Honey

Abu Y usuf stated that an 'ushr of 1/10 was levied on honey if it was found on 'ushr land. However, no levy was imposed if the honey was found on kharaj land or hills. To Qudama, if honey was found in hilly areas, then half 'ushr was levied, that is, 1120. On this issue, Yahya cited traditions that supported Abu Yusuf's opinion.

On Extraction from the Sea

On this, there exists differences of opinion. Abu Yusuf stated that on extractions such as amber and pearls, a khumus of l;t, was to be levied. On the other hand, Qudama stated that the majority of scholars opined that there was no levy on extractions from the sea. Yahya gave a tradition that supported Qudama's statement.

On Fish

Abu Yusuf stated that no sadaqah was imposed on fish. Yahya cited a tradition which confirmed this

On Irrigation

Abu Yusufwrote that all persons had the right to use water from the great rivers. But if the canal excavated passed through land belonging to others, then those who benefited from this canal might have to pay compensation like a monthly charge. Qudama also stated the same.

Excavation of Canals

On this issue, Abu Yusuf stated that the social benefits and costs of a canal excavation must be evaluated before a canal may be excavated. If a canalled to hardships to the majority while only giving benefit to some, then the canal should be demolished. Qudama concurred with this opinion. Building of large canals, dams, bridges and similar public works in the opinion of both, must be borne by the treasury.

Excavation of Canals

Purchase of Kharaj Land by Muslims

Purchase of Kharaj Land by Muslims

Abu Yusuf wrote that if a Muslim purchased an adjacent kharaj land, then the land became 'ushr land. But Yahya stated that if the land itself was subject to kharaj according to a treaty, then a kharaJ was imposed. Otherwise it would become 'ushr land.

Covenantor Buying 'Ushr Land

On this, Yahya gave a narration that when a covenantor (one who entered into peace treaty) purchased 'ushr land, then kharaJ was levied. Abu Yusuf and Qudama did not touch much on this issue.

On Petroleum, Tar and Mercury

According to Abu Yusuf, there was no levy on these items. Yahya cited some traditions supporting this. Qudama only dealt briefly on this. Since these eitems are obtained from the ground, he classified them under rikaz and hence a charge of 1;5 was levied.

On Surplus Water

On this issue, Abu Yusuf stated that surplus water should not be sold especially for drinking purposes by men and animals. Yahya supported this view with some of his recorded traditions. From the above comparisons on different issues, it appears that thereare not much differences in the writings of the three on those issues. Yahya's recorded traditions almost entirely served as a complement to Abu Yusuf's work. There are a few issues on which Qudama and Abu Yusuf differed but they are only minor ones. The first is on the issue of 'ushr on honey taken from hilly areas; secondly, on extractions from the sea; thirdly, on dhimmis embracing Islam and the purchase of kharaj land by Muslims. Apart from those, there appears to be no fundamental differences in opinion between them.

Reception by Western Economists

In this section, our objective is to examine whether the thoughts of Abu Yusuf, Qudama bin Ja'afar and Yahya bin Adam could be received by western scholars. Let us point out, very briefly, the major issues whereby such a discussion can be carried out properly. Such issues highlighted in the thoughts of the three scholars can be classified under three major headings:

1. taxation on land;


2. public goods, externalities and social cost-benefit analysis;


3. other issues.

In the following, we will examine the writings of the three scholars on these issues in the light of current western thinking on similar issues.

Taxation on Land

As the titles of their works suggest, the writings of all the three scholars basically revolve around the question of taxation on land (and land produce). Their respective opinions on taxation and the corresponding western thinking on the related issues can be discussed under a number of sub-headings:

Importance of Land Taxes

In a period when the vastness of the conquered Muslim territories and the associated difficulties in the retainment and maintenance of such territories were the primary sources of concern for the rulers, the importance given to land taxation by the three scholars can be comprehended.

However, "in many respects, the consideration of agricultural land taxation as a separate subject may seem inappropriate" to scholars of current western thinking. This is due to the relatively low and sharply declining share of taxes on landed properties (both agricultural lands and real estates) in both the developed and the developing countries. In the United States, for example, general property taxes accounted for only 1.5 per cent of the tax revenues: of the states in 1982 as compared with 46.5 per cent in 1913 and 71.9 per I cent in 1890. A persistent argument in the tax literature of the past two or three decades, however, is that it would be desirable for developing countries to receive a larger share of their revenue in the form of agricultural land taxes.

The basic objective of land taxes, according to the three Islamic scholars, was to generate revenue for the maintenance of defense and that administration of government. It goes without saying that in the western literature, this is also the primary objective of land taxes, or of any taxes for that matter. In addition to this favorable and routine impact, the western scholars agree that, land taxes also improve the utilization of land and help increase agricultural output.

Principal Canons of Land Taxation

According to the western thinkers, a sound tax should reflect the ability to pay, be certain and understandable, convenient to pay, and take as little from taxpayers as necessary. In addition to this, the tax should not be subject to arbitrary administration and should have low compliance and administrative costs. In the following, we will see how the writings of western economists "echo" the three Islamic thinkers' deliberations on the canons of taxation.

• Defining the Tax Base



This necessitates deliberating on the issues concerning the assessment and measurement of the taxable property. The Islamic scholars placed considerable emphasis on the proper assessment of the tax base. Abu Yusuf, for example, stressed the need for proper surveying of the land and avoiding mixing up between barren and cultivated lands. Qudama, on the other hand, cited that the considerations include the status of the land (barren or cultivated), availability of water for irrigation on land, quantity of produce and, even, costs of transportation of produces.

Western economists consider the location, listing and appraisal of every taxable land a first step in the taxation process. They are also concerned about the practices which result in numerous inequalities in the tax base assessment.40 Furthermore, the western literature, and practice as well, also cater for certain considerations like exemptions, net worth, etcetera, in defining the appropriate tax base.

• Defining Tax Rate



Abu Yusuf opined against charging someone on the basis of "haphazard guess and mere conjecture"!! He stresses the need for proper survey to avoid unjust rates in taxation. Both Qudama and Abu Yusuf suggested some kind of proportional tax rate 42 when they spoke against the practice of fixed quantity on gains of fixed amount of money. All the three scholars also highlighted the need for differential taxation to reflect that efforts are duly rewarded.

Furthermore, Abu Yusuf suggested that the ruler could reduce or increase the tax according to what the tax-payers could bear.

In the western literature, setting a proper schedule of tax rates is the second most important step in taxation. We can see that the principle of tax rates suggested by the contemporary literature is in existence in the writings of these Muslim scholars. Furthermore, western scholars have noted that the light rates of taxation suggested by the three scholars, "was one factor helping to keep alive a class of smaller; independent landowners and a relatively prosperous peasantry. ...Landowners and tenants alike were reasonably assured that a substantial part of the gains of agricultural improvements would be theirs".

Thus, the relatively low rates of taxation on the land and its produce seem to have encouraged agricultural progress. A conclusion can be drawn in this effect that the rate structure of Islamic taxation would be receptive to the western economists, if this issue is to ever arise.

• Approaches to Tax Equity



In the conventional literature, a basic criterion for tax-structure design is the equity objective. Here, two strands to the thought on what constitutes a "fair share of tax contribution" may be distinguished. One approach rests on the benefit principle, that is, "taxes should be levied in accordance with the benefits arising from the government services financed by the taxes".

The other stand rests on the "ability-to-pay" principle, that is, levying taxes on how much the individual could afford to pay. "Unequal, according to the principle, should be treated unequally (vertical equity) while equals were to be treated equally (horizontal equity)'.

It may safely be suggested that the equity criterion adopted by the three Islamic scholars is the "ability-to-pay" principle. Abu Yusuf opined that the ruler could reduce or increase the tax levy (kharaj) on the people "according to what they can bear."Qudama was more specific when he categorized (top, middle and low) the taxpayers according to their wealth and opined that the tax burden should fall on the people according to their ability to pay. However, the scholar's propagation of the ability-to-pay principle should not be taken as propagation of progressive taxation. What they suggested was that the rich should pay more, but not necessarily a higher rate. Western scholars have noticed the "plus-factors" of the ability to pay principle. The principle has its western foundations in the writings of both

Adam Smith and John Stuart Mill. At present, the ability-to-pay has been emphasized by redistribution-oriented writers because the approach can encompass the redistribute tax-transfer function more. However, the western scholars have also noted the difficulties of the ability-to-pay approach because of the restrictive assumptions it places on the utility function.

• Tax Evasion, Tax Administration and Arrears




On the tax evasion, Abu Yusuf was aware of the problem and he opined against mixing up of properties or devising any other means to evade the payment of zakah.

On tax administration, besides highlighting the need for proper surveying, the Islamic scholars also discussed issues concerning tax collection and its administration. Abu Yusuf, for example, discussed at length the quality of tax-administrators and collectors and the need for proper delegation of authority in tax administration. Qudama, on the other hand, spoke in detail, about the fees of the collectors.

The question of tax administration has been given little attention by western economists. The western thinkers' prime, if not the only, consideration on tax administration, is that the service should be provided efficiently, that is, "the desired quality of service should be offered at minimum cost". It is unlikely that the western thinkers would be receptive to the need for highlighting the characters of collectors for practical consideration.

As regard to the arrears, Qudama cited Imam Shafi'i and Imam Abu Hanifa. The former held that arrears should be collected in full when the taxpayer was able to pay, while the latter held that although more would be charged in future, but nothing for the past. Western thinkers assume that "all taxes must be collected". In their opinion, the delinquent tax-payers may be allowed periods of several months during which they can pay back taxes plus penalties and interest charges, and "if the tax remains unpaid at the end of this period, the tax lien on the property is offered at a public tax sale".

General Considerations and Conclusions on Taxation

In his book, Kitab al-Kharaj, Abu Yusuf elaborated the conditions for taxation. These are

1. charging a justifiable minimum


2. no oppression of tax-payers


3. maintenance of a healthy treasury,


4. benefiting both government and tax-payers, and


5. in choosing between alternative policies having the same effects on treasury, preferring the one that benefits tax-payers.

On the whole, the basic underlying consideration of a good tax policy as suggested by the three Islamic scholars is public interest.

If we consider the above conditions and the discussion that proceeds immediately and compare it with what the western scholars view as basic requirements for a good taxation, we see that in most instances the western thinkers are receptive to the thought of their Muslim predecessors. However, it should be pointed out that the western thinkers, in general, place too much emphasis on the allocation effects of taxation, while the Islamic scholars are more concerned with distributive justice and hence, public interest. Nevertheless, this gap seems to be narrowing down in view of a general conjecture about the merit of Islamic taxation by some western authors.

Public Goods, Externalities and Social Cost-Benefit Analysis

The three Islamic scholars also deliberated on the following significant issues of public finance. Their deliberations on these issues seem to be strikingly contemporary when compared with western standards. Let us examine this in detail.

Public goods

With respect to the nature of public goods, Abu Yusuf held the view that all the Muslims were sharers of great rivers. No one had the right to prevent others (i.e. to exclude others) from them and everyone had a right and could enjoy (i.e. non-rival) the benefits of such public property. The other two scholars also held the same view.

As regards to the provision of public goods, both Abu Yusuf and Qudama bin Ja'afar were of the opinion that the government was responsible for providing such goods which involved a huge expenditure, such as excavation of big canals.

In the western literature, as well, non-excludability and non-rivalness are the essential features of public goods. Furthermore, in general, the western scholars hold the view that the responsibility for the provision of such goods lies with the government.

Externalities

The Islamic scholars put great emphasis on the princple of no harm to others. Qudama bin Ja'afar, for example, held the view that any harm done to another's property should duly be compensated. Abu Yusuf also, for example, allowed the excavation of a canal for private use provided that "the excavation

Based on the western standards, we may say that the Islamic authors were speaking against negative externalities of private dealings and the need to compensate such externalities. In the western literature, negative externalities and the ways to compensate them are important areas of -public policy-making.

Social Cost-Benefit Analysis

AbuYusufand Qudama bin Ja'afar also discussed the decision rules of social cost-benefit analysis and the distribution of expenses involved in the provision of collective goods.

1. Decision Rules



Abu Yusuf set up the decision criteria on whether or not to go with certain project (for example, the excavation of a canal). He held that the decision-maker should look into the project, "whether it is beneficial or harmful. [fits benefit is greater, then he would leave it as it is (for example, it should go ahead); and if its harm is greater, then he would order to demolish It (i.e. should abandon it) . This is also the standard decision rule of project evaluation in the western literature.

2. Distribution of Expenses



Abu Yusuf also elaborated on the distribution of expenses in the provision of some collective goods, like the excavation of a canal for irrigation of lands belonging to a certain community. In his opinion, the responsibility should be shared collectively and so should the expenses. He stated that the expenses should be calculated and distributed accordingly. Regarding the nature of such distribution, Qudama bin Ja'afar said that the expenses should be, shared proportionally. Abu Yusuf elaborated on this, saying that "every man should pay a share of this according to his wealth." The western scholars also express the need for distributing expenses among the beneficiaries. However, what marks the difference in their approach is that the nature of distribution they propagate, is in line with the benefit principle and not, the ability-to-pay approach. Nevertheless, as has been mentioned earlier, the redistribution-oriented western scholars favor the ability-to-pay approach in sharing the expenses as well,

3. Conclusion on Public Policies



Generally, the western thinkers seem to be receptive to the ideas of the Islamic scholars on the public policy issues highlighted before. However, too much stress on allocative efficiency on the part of western thinkers causes a difference of opinion from their Islamic counterpart on the issue of distribution of expenses among beneficiaries.

Other Issues

Revival of Dead Land and Land Ownership

All the three Islamic scholars place great emphasis on the improvement of lands. Hence, they were against neglecting the land. Therefore in their opinion, whosoever revives a dead land becomes its owner, and similarly, whosoever neglects his land for a specified period (three years) loses his claim of ownership. In the western literature, there is a method to acquire title to unused or abandoned land. This is known as adverse possession. However, the law requires that use continues for periods ranging from ten to twenty years before one can acquire title by adverse possession. Furthermore, western thinkers also note that, "Islamic Laws giving the ownership of dead or abandoned lands to those who reclaimed them may also have favored the creation of smaller proprietorships, some of them gained from large estates ...Such a panoply of forms of exploitation no doubt favored innovation."

Price Theory

Abu Yusuf deliberated that prices come from God, hence excess supply of goods may not imply low prices while excess demand may not imply high prices. On a cursory glance, this may seen as a violation of modern price theory. But, by setting the perspective on the quantity space of the price theory schedule it should become clear that Abu Yusuf was speaking about such goods which the western scholars categorize as necessities, i.e. goods having low elasticity.

Sale of Deceit

The Islamic scholars opined against any kind of selling that involved deceit like selling of fishes in water. Their opinions emerged in view of the Islamic standards they adhered to. The western literature does not place such a great emphasis on maintaining such ethical standards in transactions. In practice, we see speculative selling of stocks, etcetera.

Conclusion to Other Issues

We see, on the issues of revival of dead lands towards acquisition and price theory, the western literature is receptive to the Islamic views. However, on the issue of sale of deceit, the former differs significantly from the latter.

Conclusion

In our discussion, we have seen that the western thinkers are, in general, receptive to the ideas of Abu Yusuf, Yahya bin Adam and Qudama bin Ja'afar. Trivial although sometimes significant differences between the two arise because while the former stresses allocation aspects, the latter emphasizes distributive justice.