Zakat is of great benefit to individuals. It has innumerable advantages. The Messenger of Allah declared that if all the Ashab-al-Nisab paid and distribute their Zakat properly, no one would be left needy in the entire community. This ideal state of affairs was practically achieved in the time of the second Caliph Umer (رضی اللہ تعالیٰ عنہ), and later, too, once in the time of Umer bin Abdul Aziz.
People would roam the streets with Zakat in their hands but
would find no one deserving. The Messenger of Allah warned that if the society
withheld Zakat from the needy, Allah would withhold rain and blessings from
them.
Equal distribution of wealth is not only impossible but also
non-pragmatic, as the fall of communism in the last century has proven. Islam, the
system devised by Allah, enforces the fair distribution of wealth. Those who
have earned it through halal (legal) means are not deprived of its benefits;
rather they only share a small portion of it with others.
Now we come to the part why Zakat is also called "
increase". When a portion of the stored wealth of the upper echelons of
society is distributed amongst the poor, they immediately rush to fulfill their needs
in the marketplace. The result is that the wealth that was taken from the rich ends
up back with them, this time in the form of profit.
The increased profit results in payment of further Zakat and
thus a wonderful cycle of wealth distribution begins that is ever-increasing.
This healthy circulation is the primary objective of the Islamic economic system. The welfare system of Zakat bridges the rich-poor gap, ease the
tensions between the classes, and promotes mutual love between them.
In the absence of Zakat, resentment between the haves and
the have-nots rises to the extent of hatred; the crime rate increases, and
anarchy reigns. Hence the responsibility for the collection and distribution of
Zakat has been placed on the State by the Messenger of Allah, and the Caliphs
continued this practice.