Tax Farming

views updated


Means of managing agrarian revenues, as well as of financing governmental programs.

Similar to the contemporary concept of privatization, tax farming is a poorly understood phenomenon in Middle Eastern history. It is often linked to the abuse of state power and debates on the institutional causes of the fall of premodern Islamic states. In essence, however, tax farming refers to any type of tax collection conducted by private individuals rather than salaried state personnel. These individuals acquire the right, often by auction, to collect a defined revenue for a specific period of time. From the Umayyads onward, Islamic states contracted out collection of taxes in proximate and more distant provinces. Tax farming allowed administrators a degree of flexibility and an opportunity to strike a compromise between the old and the new. Indeed, the earliest Islamic administrators of Egypt awarded contracts to Copts and women. Although the powers of tax farmers were contingent on the type of revenue collected, the status of taxpayers, and the degree of state oversight, Islamic governments found ways to curb abuse and default of contract by requiring financial guarantors and subdividing responsibilities. As this form of collection falls under the legal notions of contract, Islamic lawyers usually separate the discussion of tax farming from the actual fiscal responsibilities of Muslim and non-Muslim subjects in terms of alms (zakat), tithes (ushr), and poll taxes (jizya).

There are few comprehensive studies of tax farming during the period between the Abbasids and the Mongols, though Middle Eastern states contracted out to private agents many types of taxes, both those that were Islamically recognized and those that were not. More than an institutional or legal question, tax farming may be regarded as a window on the evolving structure of premodern Islamic states and its relation to society. Because most of the Islamic schools of law regarded conquered land of non-Muslim populations (kharaj) to be, effectively, state land, tax farming was utilized alongside the iqta or tax fief, a form of resident administration, as an important means of managing agrarian revenues. Pending further research, one may speculate that the alternation between military and privatized forms of tax collection preceding and after the thirteenth-century Mongol invasions was not only the result of corruption of institutions or abuse of office, as the private auction of tax fiefs during the later Mamluk period in Egypt suggests, but also a means of coping with the dislocation of agrarian populations, greater demand for cash revenues, and changing land-use patterns.

Although the forms of tax farming in the Middle East after the sixteenth century have similar legal bases, the practices coincide with new worldwide trends, namely the escalating costs of warfare and expanding global trade. In the Ottoman Empire, for example, tax farming before the sixteenth century had been largely limited to certain commercial revenues and tariffs, and many of the tax farmers were non-Muslims. But as participants in the "gunpowder revolution" and the battle for Europe and West Asia, the Ottomans required ever greater sources of cash to pay their infantries. Auctions of revenue contracts were a means of borrowing: They allowed the state to anticipate future tax receipts, albeit at a certain loss. Although the Ottoman state continued to administer many taxes directly, over the seventeenth century, many Muslim Ottoman officers and civilians bid for rights to collect taxes on the extensive crown and vizierial domains, tariffs, and manufacturing and tribal taxes, as well as to hold certain offices. A 1695 decree gave Muslim tax farmers the right to hold contracts for life (malikane mukataa) and to pass these holdings on to male heirs. Although this extensive use of tax farming produced many problems, it also reinforced the loyalty of Muslim tax farmers, if only by dint of self-interest, to the state, which awarded and recognized these rights.

Since the French Revolution, social scientists have tended to regard fiscal decentralization as one of the ancien régime's greatest evils as did the Ottoman state planners who tried to restrict and then eliminate tax farming in the early decades of the nineteenth century. Despite good intentions, Middle Eastern reformers were frustrated by chronic fiscal shortfalls and lack of administrative staff. No such compunctions about modern statecraft burdened the French colonial regime in Algeria, however. Well into mid-century, French imperialists continued to adapt an older tax-farming system to new political and fiscal purposes.


Cuno, Kenneth M. The Pasha's Peasants: Land, Society, and Economy in Lower Egypt, 17401858. Cambridge, U.K., and New York: Cambridge University Press, 1992.

Frantz-Murphy, Gladys. "Land Tenure and Social Transformation in Early Islamic Egypt." In Land Tenure and Social Transformation in the Middle East, edited by Tarif Khalidi. Beirut: American University of Beirut, 1984.

Johansen, Baber. The Islamic Law on Land Tax and Rent. London and New York: Croon Helm, 1988.

Morony, Michael G. "Land Holding and Social Change: Lower al-Iraq in the Early Islamic Period." In Land Tenure and Social Transformation in the Middle East, edited by Tarif Khalidi. Beirut: American University of Beirut, 1984.

Salzmann, Ariel. "An Ancien Régime Revisited: Privatization and Political Economy in the Eighteenth-Century Ottoman Empire." Politics & Society 21, no. 4 (1993): 393423.

ariel salzmann