MS Omar Attorney

Attorneys and Conveyancers

Shariah Articles


Guidance Note On Calculation Of Zakah On JMH Shares

Basic Principle

 1. The correct method of calculating Zakah in respect of the shares, owned by a Muslim shareholder, is based on the following principles:

1.1     ownership of a share in JMH represents a pro rata undivided share in the underlying assets of the company;

1.2     For that purpose, the shareholder must determine the value of the underlying Zakaatable assets, after deducting relevant liabilities, at his or her Zakah valuation date, which is normally Ramadaan.

         Zakaatable Assets

2.       We have examined the consolidated management accounts of JMH as at 31st May 2015, and have determined the following, in consultation with the Group Accounting Services Manager, Mr Rafeek Nakooda:

                                                                                                ZAKAATABLE ASSETS

          Inventory (stock)                                                              13 538 810                   Trade and Other Receivables                                          137 214 995

          Cash and Cash equivalents                                                 81 597 005

          Current Income Tax Asset                                                   9 061 815


          Total Zakaatable Assets                                                      R241 412 625

          Less Liabilities:

          Trade and Other Payables                                                    54 457 656

          Bank overdraft (borrowings)                                               67 353 546

          Current Tax Liability                                                                      1 526 259       


          Net Value of Zakaatable Assets as at 31 May 2015   R118 075 164


          Zakaatable Value Per Share


3.       The Zakaatable value per share is R37.72 determined as follows:

                    Net Zakaatable Value

                    total number of issued shares

                   R118 075 164

                        3 130 700

                   = R37.72 per share

4.       For example, if a shareholder owns 10 000 ordinary shares on his or her Zakah valuation date, then, the Zakah due and payable is:

                   2.5% of 10 000 x R37.72

         2.5% of R377 200

         =  R9 430,00 (Zakah)

5.       The aforegoing is subject to a qualification : if the shareholder acquired the shares in JMH with the primary intention, determined at time of acquisition, to resell the same at a profit, then, in such event, the shares so acquired would constitute trading stock in his or her hands. In such event, Zakah is due and payable on the market value of the shares on the Zakah valuation date. The recent trading price per share is R548.




In deducting the liabilities in paragraph 2 above, we have excluded the liability incurred in purchasing the LifeHealthCare shares. This accords with the differences of opinion, in the various schools, (Mazaaib) as to whether liabilities should be taken into account, and if so, what categories of liabilities. The Maliki school is practical because it permits only those liabilities incurred in respect of a Zakaatable asset to be deducted. In the instant case, if the LifeHealthCare share acquisition liability were to be taken into account, no Zakah would be payable, and this is contrary to the overriding objectives of the Shariah.

Our Testimonials

I personally know the honourable Shaykh Mahomed Shoaib Omar for over thirty years. I found him to be an ardent seeker of knowledge, quick of mind &  constantly devoted to the study of the books of fiqh &  has written himself a number of papers. He has been amongst the foremost participants in drafting the Muslim Personal Law for S.Africa, so that it may be enforced there; and the majority of local Ulama have endorsed this.

~ Mufti Taqi Uthmani

Contact Us


Attorneys and Conveyancers
Suite 1603, 16th Floor
Nedbank House
30 Ingcuce Street
(formerly Albert Street)
Durban, South Africa

Tel (031) 306 3282