Paying the Jizya tax at S9:29 is mandatory by the unbelievers to the authority and so is payment of Zakat tax.
The verse below is not payment for compulsion in religion to believe in Allah but compulsion to pay taxes levied on all communities.
S9:29 Fight those who believe not in Allah nor the Last Day, (REFERRED TO THE ATHEISTS) nor hold that forbidden which hath been forbidden by Allah and His Messenger, nor acknowledge the religion of Truth, of the People of the Book, (REFERRED TO THE CHRISTIANS & THE JEWS) until they pay the Jizya with willing submission, and feel themselves subdued.
THE ABOVE VERSE IS TO FIGHT THOSE WHO REFUSED TO PAY THE TAX (JIZYAH) BUT IS NOT A COMPULSION TO KILL THOSE WHO DID NOT BELIEVE IN ISLAM AND ALLAH UNTIL THEY PAY!!!
The Muslims were also to pay the same amount of tax through the Zakat which is equivalent of the Jizya.
The fraction of tax to be paid by all communities whether Unbelievers or Muslims is 1/5 or 20 percent of profit –
S8:41 And know that out of all the booty that ye may acquire, a fifth share is assigned to Allah, and to the Messenger, and to near relatives, orphans, the needy, and the wayfarer, if ye do believe in Allah and in the revelation We sent down to Our servant on the Day of Testing, the Day of the meeting of the two forces. For Allah hath power over all things.
All will be punished whether the Muslims who do not pay the zakat and the non Muslims who do not pay the Jizya until they pay.
These verses below are referring to renegade Muslims who refused to pay the zakat and were classified as polytheists/ pagans –
S41:6-7 Say, O [Muhammad], “I am only a man like you to whom it has been revealed that your god is but one God; so take a straight course to Him and seek His forgiveness.” And woe to those who associate others with Allah (polytheists), those who do not give zakah, and in the Hereafter they are disbelievers.
These renegade Muslims will be reprimanded until they pay up! And believers will fight those renegade people who do not pay taxes and fight them until they pay and make repentance!
S9:5 But when the forbidden months are past, then fight the Pagans wherever ye find them, an seize them, beleaguer them, and lie in wait for them in every stratagem (of war); but if they repent, and establish regular prayers and practise regular charity (Zakat), then open the way for them: for Allah is Oft-forgiving, Most Merciful.
Thus, S9:29 and S9:5 were compulsion in paying the taxes jizyah by non Muslims and zakat by the renegade Muslims respectively and not compulsion in beliefs unless they pay!
The reasons for the different Arabic words use for taxes on non Muslims “the jizyah” is because when a non Muslim pays he treated the payment as a duty and his responsibility to the state.
However, when a Muslim pays the tax Zakat he will pay in the name of Allah and some religious prayers to go with it and treated it as a religious rituals of purifying the souls.
Nevertheless, all have to pay the same taxes with the same amount to the state authority. The tax is not a ransom to free unbelievers becoming Muslims!
S2:256 Let there be no compulsion in religion: Truth stands out clear from Error: whoever rejects evil and believes in Allah hath grasped the most trustworthy hand-hold, that never breaks. And Allah heareth and knoweth all things.
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Pondering with Saifuddin's index 