CONCERNING LIMITATION OF THE PROFIT MARGIN OF
Quote -The Council of the Islamic
Fiqh Academy, holding its Fifth Session, in Kuwait City (State of
Kuwait), from 1st to 6th
Jummada al-Oula 1409 H (10 to 15 December 1988);
reviewed the papers presented by the members and experts
on “Limitation of profit margin for traders” and having
listened to the discussions held on the subject;
- First: The basic
principle in the Qur’an and the Sunnah of the Prophet (PBUH)
is that a person should be freed to buy and sell and dispose of his
possession and money, within the framework of Islamic Shari’a,
in accordance with the divine command: (“O ye who believe
consume not each other’s property in vanities, unless there is
trade based on mutual acceptance”).
Second: There is no restriction on the
percentage of profit which trader may make in his transactions. It
is generally left to the merchants themselves, the business
environment and the nature of the merchant and of the goods.
Care should be given, however. to ethics recommended by Shari’a,
such as moderation, contention, leniency and indulgence.
Third: Shari’a texts have
spelt out the necessity to keep the transactions away from illicit
acts like fraud, cheating deceit, forgery, concealment of actual
benefits monopoly, which are detrimental to society and individuals.
Fourth: Government should not be
involved in fixing prices except only when obvious pitfalls are
noticed within the market and the price, due to artificial factors.
In this case, the Government should intervene by applying adequate
means to get rid of these factors, the causes of effects, excessive
price increase and fraud.
Verily, Allah is All-Knowing -
(From the Book "Resolution and Recommendations of
the Council of the Islamic Fiqh Academy (1985-2000)”:
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