Prospects of Poverty Eradication Through the Existing " Zakat " System in Pakistan

Abstract

Zakat which literally means growth, extension and purification is a premium (in most cases annual) on all forms of accumulated productive wealth and on a variety of agricultural produce. It is calculated at various rates according to the nature of the asset or product, and is due to 'the needy' (Mustahqueen or Mustahiq for singular) of the Muslim community.! It is one of the five basic tenets of Islam and besides being an obligatory act of worship, it is a system through which a Muslim society can eradicate poverty and inequalities [Qardhani (1981)]. In Pakistan till recent years people used to pay their zakat to the needy on self-assessed basis Without involving state functionaries. However, following the Sunni Muslim view that collection and disbursement of one of the functions of an Islamic state, a system to this effect was introduced for the first time in Pakistan in 1980. Accordingly the collection of zakat on non-agricultural assets started in June 1980 (Ramdall 1400) and that of ushr (i.e. zakat on agricultural produce) from Rabi season of 1983. The introduction of the zakat system in Pakistan is indeed a unique experiment of transforming religious ideals in practical institutions. Given the experience of one decade now, it would, therefore, be useful to see as to what extent the system as practiced in Pakistan has the potential to eradicate poverty from society. The present paper is an attempt in this 'direction. It is drawn from an overall study of the zakat system in Pakistan based on primary data collected through a random sample survey.