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Concept
Bayt al-mal
Summary
Bayt al-mal (بيت المال) is an Arabic term that is translated as "House of money" or "House of wealth." Historically, it was a financial institution responsible for the administration of taxes in Islamic states, particularly in the early Islamic Caliphate. It served as a royal treasury for the caliphs and sultans, managing personal finances and government expenditures. Further, it administered distributions of zakat revenues for public works. Modern Islamic economists deem the institutional framework appropriate for contemporary Islamic societies.
Bayt al-mal was the department that dealt with the revenues and all other economical matters of the state. In the time of Muhammad, there was no permanent Bait-ul-Mal or public treasury. Whatever revenues or other amounts were received were distributed immediately. During Prophethood, the last receipt was tribute from Bahrain amounting 800000 dirham which was distributed in just one sitting. There were no salaries to be paid, and there was no state expenditure. Hence the need for the treasury at public level was not felt. In the time of Abu Bakr as well there was no treasury. Abu Bakr earmarked a house where all money was kept on receipt. As all money was distributed immediately the treasury generally remained locked up. At the time of the death of Abu Bakr, there was only one dirham in the public treasury.
According to Rahman, the word 'bayt mal al-muslimin' (or 'bayt mal-Allah''') referred originally to the building in early Muslim history where war spoils and other public properties of the caliphate were stored and re-distributed to the community, but over time the term evolved to refer to the societal institution owning such public properties of the Muslims, and hence encompasses the authority in control of the state's public revenue and expenditures.
In the time of Umar, things changed. With the extension in conquests money came in larger quantities, Umar also allowed salaries to men fighting in the army. Abu Huraira, who was the Governor of Bahrain, sent a revenue of five hundred thousand dirhams.
Official source
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