Ruling on financial penalties in Islam
Question

What is the ruling on financial penalties in Islam?
Praise be to Allah.The majority of scholars, including the four imams, said that imposing financial penalties is not permitted. Some of them responded to the cases in which it was reported that the punishment took the form of imposing a financial penalty by saying that this had been abrogated, and that it had been prescribed at the beginning of Islam but was later abrogated. They gave as the reason for not allowing punishment by seizing money the fact that this kind of punishment could be a means for unjust rulers to seize people’s wealth unlawfully. 
But Shaykh al-Islam Ibn Taymiyah and his student Ibn al-Qayyim suggested that it is permissible to punish a person by imposing a financial penalty if the authorities think that this will serve the purpose and deter wrongdoers and put a stop to evil, because ta’zeer [punishments to be decided in cases where no specific punishment has been prescribed] is a broad category ranging from verbal rebuke to execution, if evil cannot be stopped in any other way. Imposing financial penalties is one form of ta’zeer punishment which may serve as a deterrent to aggressors. 
The two shaykhs refuted the claim that this had been abrogated, and they denied that in strong terms. They quoted as evidence the reports of numerous cases in which financial penalties played a part.
The shaykh said: those who claim that this was abrogated do not have any shar’i evidence, either from the Qur’aan or the Sunnah. It is permissible according to the principles set out by Ahmad, because there was no dispute among his companions concerning the fact that financial penalties were not abrogated in totality. 
Among the evidence that ta’zeer may take the form of a financial penalty are the following: 
The Prophet (peace and blessings of Allaah be upon him) allowed seizing the property of one who hunted in the sanctuary of Madeenah for the one who found it. 
He commanded that the amphorae and vessels for wine should be smashed. 
He commanded ‘Abd-Allaah ibn ‘Umar to burn the two garments which were dyed with safflower. 
He increased the penalty for one who stole something that was not secured. 
He destroyed the mosque built by the hypocrites by way of harm (masjid al-diraar). 
He denied the murderer the right to inherit or to be a beneficiary of a will.
 Shaykh al-Islam said: financial penalties are of three kinds: 
1 – Destruction. This means the destruction of evil items, such as breaking and burning idols, breaking musical instruments, smashing wine vessels, burning down taverns in which wine is sold, destroying books of heresy and atheism and promiscuous movies and three-dimensional pictures, and so on. 
2 – Changing, such as destroyed forged money and curtains on which there are images, and making them into cushions and so on. 
3 – Confiscation. Such as confiscating stolen dates or adulterated saffron and giving it in charity. Such things should be confiscated and given in charity, or their price should be given in charity.