AN EMPIRICAL ISLAMIC TREASURY: REDISTRIBUTION, NON-EXTRACTIVE REVENUE AND DEBT-FREE BUDGETING

Abstract

As contemporary fiscal systems, often burdened by debt and characterised by coercive mechanisms, attract increasing scrutiny, the search for ethical financial alternatives is intensifying. Although the existing body of literature discusses individual Islamic financial instruments such as Zakat, Waqf, and Kharaj, it frequently addresses them in isolation. This has resulted in a lack of integrated analysis that reconstructs early public finance as a coherent and embedded system. This paper seeks to address that gap by empirically examining the revenue framework that operated during the administration of Prophet Muhammad (PBUH) and the four rightly guided Caliphs. Employing a structured historiographical methodology, the study draws primarily from classical fiscal sources (Kitab al-Amwal, al-Kharaj), the Qur’an, Hadith, administrative records, peer-reviewed literature, and interviews with subject-matter experts. The reconstruction of historical evidence involves a recursive process that shifts between heuristic exploration, source authentication, thematic consolidation, and empirical triangulation, in order to ensure analytical precision and historical coverage. The findings reveal a threefold revenue structure comprising obligatory (Zakat, Kharaj), voluntary (Waqf, Infaq), and incidental (Ghanimah, Fayʾ) components. This system was grounded in ethical principles, centred on social welfare, and operated with transparency. It functioned without reliance on debt instruments, interest-based mechanisms, or coercive taxation. Revenue distribution was guided by codified norms that prioritised fairness, social responsibility, and the economic capacity of contributors. Such a model facilitated redistributive governance through moral authority and institutional trust, rather than compulsion.