islamic economic renaissance 369The difference between the researchers into the Islamic fiscal pol-
icy came when taxation was the subject of discussion. Kahf, basing
his views on the premise that the responsibilities of the state do not
go beyond ensuring that the socially determined subsistence standard
of living to the poor is fulfilled, argues that with the exception of
taxes required for the purpose of defense, the Islamic state has no
financial rights beyond Zakàh (Kahf, 1983). Quoting the views of
the consensus of earlier jurists, Kahf is of the view of limiting the
authority of the state either in imposing taxes or in other policies of
fiscal management. Consequently, Kahf is against using taxes as a
tool for income redistribution (ibid.). Kahf ’s views are not however
shared by other writers who argue that the Islamic state should have
a more effective role in using taxation, including imposing taxes
beyond Zakàh, and other policies to achieve the desired objectives
of an Islamic society, such as promotion of a more egalitarian socio-
economic order, acceleration of economic growth, and maintenance
of monetary stability (Ahmed et al., 1983).
In assigning a high priority to the Islamic fiscal policy, Metwally
has a novel idea. In his emphasis on the importance of fiscal pol-
icy to achieve stabilization and equilibrium in the money market,
and with the absence of interest that may help achieve this objec-
tive, the Islamic state may impose “economic dues” on “income and
idle assets whose rates may vary depending upon the stabilization
conditions, which by making idle cash costly, may provide an incen-
tive to investment (Metwally, 1983). The idea might look theoreti-
cally sound, but practically it may lead to side effects such as increasing
consumption instead of savings. In addition this may amount to
imposing a levy on the cash twice, once by Zakàh and another by
Metwally’s economic dues, which is not permissible in the Sharì"ah.
In outlining the major objectives of the monetary policy in an
Islamic state, three main objectives have been identified (Ahmed
et al., 1983). These are: stability in the value of money, economic well
being with full employment and an optimum rate of economic growth,
and promotion of distributive justice. Al-Jarhi stresses that it is almost
obligatory on the central bank of an Islamic economy to maintain
the value of money and suggests that the central bank should allow
expansion of money supply only to the extent that it is justified by
a potential contribution to growth in real balances (Al-Jarhi, 1981).
Stability of the value of money ought to be given high priority in
the Islamic monetary policy, in the view of Chapra, for the impli-
cations this may have on the concept of Ribàin Islam as in the