Bayt al-Mal in the Prophet and the Caliphs’ Era
The Islamic financial system is one of the most independent and noble systems in our civilization. The Glorious Qur'an states this fact in the saying of Allah: (In order that it may not (merely) make a circuit between the wealthy among you.) (Al-Hashr 59:7) Therefore, the Islamic civilization aims at the necessary rotation of money among all people not only the rich ones, because this may cause embarrassment to the Muslim community and raise a social class unrightfully.
Importance and Revenues of the State's Public Treasury
Bayt al-Mal, or public treasury of of the Muslim State, is a foundation that supervises all the revenues of the State and its different expenses, to be under the authority of the caliph or the viceroy, who is responsible for putting them in their legal ways of spending for the benefit of the Muslim Ummah (nation) both in peace and war.
The important revenues of Bayt Al-Mal include zakah (obligatory charity), kharaj (land tax), jizyah (poll tax required from non-Muslims living under the protection of the Muslim state), booty, spoils, and endowments. All of these types, excluding the endowments, include tax whether on property, land, or soul.
The jurisdictions of Bayt Al-Mal include the money due for Muslims collectively not owned by one of them and the money spent for the benefit of Muslims. Therefore, Bayt Al-Mal is one of the important foundations of the Islamic civilization as it is the only authority entitled to spending on the different Muslim welfare. It has the authorities of a ministry of finance and a central bank in the current days.
Expenses of Bayt Al-Mal
The expenses of Bayt Al-Mal include:
First: Salaries of viceroys, judges, civil servants, and staff of public offices, including Commander of the Faithful or the caliph himself.
Second: Salaries of soldiers and army.
Third: Supplying the army with weapons, fighting equipment, ammunition, horses, and their equivalents.
Fourth: Establishing public projects, such as bridges, dams, levelling roads, public buildings, rest houses, and mosques.
Fifth: Expenses of the social foundations, such as hospitals, prisons, and other State facilities.
Sixth: Providing the poor, the orphans, the widows and their dependants because the State has to sustain them.
|The Islamic civilization has the precedence in regulating the revenues and the expenses of the State.|
Therefore this is the precise economic system developed by the Islamic civilization in its early stages, preceding any other civilization. The Islamic civilization has the precedence in regulating the revenues and the expenses of the State. However, after regulating these revenues and expenses, there may be some urgent circumstances, such as disasters, famine, and lack of rain or deadly epidemic, which force the State to ask the rich people to donate without coercion to save the majority of Muslims. `Uthman ibn `Affan (may Allah be pleased with him) donated much money to save the Muslims at the time of a famine during the reign of Abu Bakr (may Allah be pleased with him). The same was done by `Abdur-Rahman ibn `Awf (may Allah be pleased with him) during the reign of `Umar ibn Al-Khattab (may Allah be pleased with him). There are many examples for that in the Islamic History, which secured flow of money to the State treasury without coercion, expropriation, or force.
During the Prophet's Time
The Muslims started founding Bayt Al-Mal since the time of the Prophet (peace and blessings be upon him). He used to appoint the governors and the commanders for the different regions. Every commander was responsible for collecting zakah, jizyah, and the fifths of the booty, and kharaj. Sometime, the Prophet (peace and blessings be upon him) used to appoint someone responsible only for the financial affairs to collect the due money for the State including, kharaj, jizyah, Tenths (zakah on lands, properties, and the fruits) and charity and pay them to Bayt Al-Mal. The Prophet (peace and blessings be upon him) did the same with Mu`adh ibn Jabal (may Allah be pleased with him) when he sent him to Yemen to collect the money of zakah from its officials and with `Ubaydah ibn Al-Jarrah (may Allah be pleased withhim) when he sent him to Al-Bahrain to collect the jizyah….
The founding of Bayt Al-Mal since the reign of the Prophet (peace and blessings be upon him) is a clear evidence on the precision of the Islamic financial systems since this early time. Therefore, it is natural that Bayt Al-Mal develops according to the different ages.
During `Umar ibn Al-Khattab's Time
During the time of the Rightly-Guided Caliphs, too many countries were conquered. At the reign of `Umar ibn Al-Khattab, the Levant, Iraq, Egypt, Arabian Peninsula, Jabal, Armenia, Rey, Azerbaijan, and Asfahan were conquered. At the reign of `Uthman, Karman, Sejestan, Naysabour, Persia, Tabaristan, Hirah, the rest of Khurasan and Afriqiya (Tunisia) were conquered. Therefore, it was natural that too much money was flown abundantly to the headquarters of the Islamic caliphate in Madinah.
The huge amount of money led `Umar ibn Al-Khattab (may Allah be pleased with him) to cry one day when he saw too many spoils of war flowing to Madinah full of gold, silver, precious stones, millions of dirhams and dinars, slaves and clothes. Thus, `Umar ibn Al-Khattab issued orders to found a system for a Diwan (public office) of Byat Al-Mal, so he defined salaries for the masses and soldiers 
|`Umar ibn Al-Khattab used to empty it from the money and distribute it to the needy people once a year.|
The policy of `Umar ibn Al-Khattab rested on distributing the money to the needy people rather saving it in Bayt Al-Mal. Ibn Al-Jawzy said, "`Umar used to command emptying Bayt Al-Mal from money once a year," meaning that he used to empty it from the money and distribute it to the needy people once a year. There is no doubt that this is one of the great actions of the Islamic civilization, as the Muslim caliphs in the early ages used to give the masses their rights assigned to them by the State at certain time. This is a kind of social solidarity and systematic plan between the ruler and the ruled.
During`Ali ibn Abu Talib's Time
The Commander of the Faithful `Ali ibn Abu Talib (may Allah be pleased with him) used to "distribute all the money of Bayt Al-Mal every Friday," fearing the temptation of money on the ruler and the ruled. It was narrated that once he entered Bayt Al-Mal and found gold and silver he said, "Be more glittering yellow (i.e. gold) and be whiter (i.e. silver) but tempt anyone else, I do not need you."
Most remarkable here is that the caliphs used to separate between the political and financial administrations to eliminate confusion, avoid problems and as a separation between the different authorities. `Umar ibn Al-Khattab appointed `Ammar ibn Yaser as a viceroy of Kufah and sent `Abdullahh him to be the officer of Bayt Al-Mal and considered him as "teacher and vizier." ibn Mas`ud wit
 Munir Hasan Abdul-Qader, Mu'asasat Bayt al-Mal fi Sadr al-Islam (The Foundation of Bayt al-Mal in the Early Days of Islam), P. 47
 Shawqy Abu Khalil, al-Hadarah al-`Arabiyyah al-Islamiyyah (The Arab Islamic Civilization), P. 331
Al Mawardi: al-Ahkam al-Sultaniyyah (The Ordinances of Government), p. 278
 See: `Ali Ibn Naif al-Shahud, al-Hadarah al-Islamiyyah bayna Asalat al-Madi wa Aamal al-Mustaqbal (The Islamic Civilization between the Genuineness of the Past and the Hopes of the Future), P. 257
 Abu 'Ubayd: al-Amwal (The Money), P. 41
 See: Al Qalqashany, Subh al-A`sha, 3/285
 Al Tabary: Tarikh al-Umam wa l-Muluk (History of Nations and Kings), 2/519
 Ibn al-Jawzy: Manaqib Amir al-Mu'minin `Umar ibn al-Khattab (The Attributes of the Commander of the Faithful `Umar Ibn al-Khattab), P. 79.
 Abul-'Abbas al-Nasiry: al-Istiqsa' ,1/112
 Ibn al-Wardy: Tarikh Ibn al-Wardy, 1/157
 Ibn Sa`d: Al-Tabaqat al Kubra, 3/255