Fatwa ID: 07004

Answered by: Mufti Mohammed Haroon Hussain

Question:

Just curious to know why do we say to calculate zakat on retail value and not wholesale for business inventory? Keeping in mind these points:

• You may not get the desired retail price when you sell
• If he wanted to sell and exit the business today, he will only get the wholesale value for his inventory
• Say he never purchased the merchandise and it was in the form of cash, the cash savings would still be equivalent to the wholesale value
• Even if he does pay on wholesale he can calculate the saved gains next year when it is in the form of cash
• Retail value is pretty much a prediction one hopes to get.

Any help?

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

The retail price is the one that the zakat will be given according to¹. The reason for all such standpoints in zakat is that this is what is most beneficial for the poor and needy, so we take the stance of what is most in their interest².

Only Allah knows best

Written by Mufti Mohammed Haroon Hussain

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

1 وتعتبر القيمة يوم الوجوب ويقوّم في البلد الذي المال فيه

رد المحتار – جلد 3 – ص 321– كتاب الزكاة – باب زكاة الغنم – دار الحديث القاهرة

2 واعتبر محمد الأنفع للفقراء

رد المحتار – جلد 3 – ص 341 – كتاب الزكاة – زكاة المال – دار الحديث القاهرة