An Investigation into the Hierarchy of Religious and Conventional Taxes, their Supplementarity or Substitution, with Emphasis on the Governmental Aspects of Khums and Zakat in the Islamic Economy of Iran

One of the important issues in Islamic economics is the question of determining the relationship between religious and conventional taxes. Using an analytical method, this paper studies the question whether or not religious taxes such as Khums and Zakat can be supplement to or a substitute for the conventional taxes, and if they are so, then which type should be considered as main income and which one as the supplementry income. According to the hypothesis of this research, the conventional taxes are the supplement to the religious taxes, and the basic principle in designing the tax system is the primacy of religious ttaxes. The research results indicate that in Islamic system, Khums and Zakat have priority over the conventional taxes. Furthermore, the conventional taxes can be added to the revenues of the Islamic government as secondary and supplementary types. The results of this study show that in the current state of the economy of Iran, neither of these two types of tax can serve as a substitute for the other.