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Another discriminatory Islamic tax?

December 13, 2009

Random House defines a customs duty as a toll “imposed by law on imported or, less commonly, exported goods.”  Islam defines a customs duty as another way to jack dhimmis.

Import or custom duties under Islam are referred to as “ushuur,” “usher,” or “ushr.”  These terms all mean one-tenth, like the Islamic 10 percent tax on agriculture, the ushr.  For the purposes of consistency and clarity on this blog, I will continue using “ushr” to refer to the agricultural tax and “ushuur” to refer to customs fees.

The following is the best summary of ushuur I have found from a slide presentation at Scribd about Islamic Finance:

Al-usher was imposed on merchants who came to Muslim lands from non-Muslim countries which had no treaties with Muslims.  Eventually, al-usher were extended to all the caravans, whether for internal or external trade, and to Muslim and non-Muslim merchants.

For a Muslim merchant, usher were the same as 2.5 per cent annual Zakat on merchandise.  A Dhimmi had to pay double what a Muslim paid, whereas a merchant from a foreign country which had no relations with Muslims had to pay double what a Dhimmi paid.  It used to be an important source of revenue for the Muslim state.

Thus, ushuur is a misleading term since under classic Islam only we foreign dhimmi merchants would pay at the one-tenth rate:

Group Customs duty rate
Muslims 2.5%
Local Dhimmis 5%
Foreigners 10%

A glance at typical customs duty or tariff rates of Middle Eastern countries show a wide variety of rates from zero to well over 100 percent.  Thus the ushuur customs duty scheme originally imposed by the second Caliph, Hazrat Umar, appears to be defunct in modern Islamic states.  It might be different if there were a clearer legal basis for the ushuur in the Koran or Hadith.  There are, however, only indirect references authorizing such fees.

There is one possible heir to the ushuur tradition:  Saudi Arabia normally imposes a 5 percent customs duty rate, and one suspects that in a country like Saudi Arabia that has an Islamized tax system, that their 5 percent rate wasn’t just pulled out of a hat.  It corresponds quite nicely to Islam’s traditional approach to customs duties charged on dhimmis.

I will close this post with a crazy idea.  A country should impose customs duties uniformly.  Any exceptions should be based on the good or service being taxed or the country where it is being imported to or from.  A customs duty should never discriminate on the basis of religion.

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