Every civilized society takes care of education, healthcare, transportation and infrastructure development. To meet the expenses it collects taxes from those who have money. Pakistan can’t be an exception. Being a Muslim majority country, it also collects money under two other heads i.e. Zakat and Usher. While some record of tax payers and amounts collected and spent is available, details about funds collected under Zakat and Usher are scanty. Even lesser details are available about how the funds collected under these two heads are being spent.
During Ziaul Haq regime, the law was passed about mandatory Zakat deduction (once every year on 1st of Ramadan) from bank accounts but few groups enjoyed exemption. With the passage of time a larger number of account holders attained exemption. There a few basic objections on the system: 1) the amount is deducted from the saving bank accounts after announcing the Nisab but no amount is deducted from current accounts, 2) whatever amount is collected, does not reach the poor, entitled to receive Zakat, 3) a significant percentage of the total amount collected is spent on the executives, their offices and vehicles responsible for Zakat distribution and above 4) the stipulated Nisab is not the amount to be paid by people as Zakat.
Those supporting the system imposed by Ziaul Haq, refer to the era of 2nd Chalip, Hazrat Umer when strict action was taken against defiant of paying Zakat. They believe that collection of Zakat and its distribution is the responsibility of the incumbent government. They also say that even if part of the Zakat is collected by the government, under the prevailing system, payment of the balance amount remains the responsibility of every citizen. This certainly creates serious confusion in determining the Nisab. Since country’s data maintenance system is too primitive, it is almost impossible for the state to determine income and wealth of every individual. Further complications arise as different rates of Zakat are applicable at different types of holdings.
A topic often being discussed is if the collection of Zakat and Usher is the responsibility of the state, then collection of any other tax by the government is not justified, because the same income can’t be taxed twice. As such the income tax being collected by the government is on the earnings and Zakat is payable on savings. Therefore, the prevailing system, Zakat deducted from the bank accounts, must be abolished immediately.
This opens another Pandora’s box, about the legitimacy of the taxation system in Pakistan. Taxes (both direct and indirect) worth trillions of rupees are collected every year. A review of the expenditures indicates bulk of this amount is spent on ruling junta, bureaucracy and debt servicing, the loans acquired in the past. Amounts spent on education, health care and supplying safe drinking water are paltry. The purpose of Zakat is poverty alleviation. If one looks at the percentage of the population being pushed below the poverty line every year, it is alarming. One can still recall people committing suicide in the groups or selling their children. This shows that neither Zakat nor the various income support programs, including Benazir Income Support program, undertaken by successive governments reach the most deserving people.
There is an old saying “Don’t give me a fish, teach me how to catch a fish”. One of the points often talked is that the Zakat collected by the government can’t be spent on development programs, because it is meant only for the ‘haves not’. A question arises, why are there poor? The reply is simple they are not educated and there are fewer job opportunities. On top of all, if a person suffers from any contentious disease, he/she may lose life savings on treatment or may face ultimate demise, leaving nothing for the family.
According to some experts, Zakat distribution and income support programs, increase the number of baggers rather than offering any sustainable income generation program for the recepietents. These people stand in queues for hours to receive a paltry amount. They do get a few thousand rupees every month, but lose self respect and gradually learn to solicit money from others on one or other pretext.
Now the percentage of females in the total population of Pakistan exceeds male. Females face various contentious problems, the worst being gender discrimination and harrasment. Very little is being done for ‘empowering women financially’. This often leads the families to starvation, after the death of male-earning member of the family. There are some charitable institutions which offer various types of vocational training to females, but the sponsors of these entities are looked down.
I recently attended a program on CPEC at SZABIST, where one of the speakers highlighted that in a number of projects being executed by the Chinese, manpower is also coming from China. The reason stated was that Pakistan suffers from an acute shortage of semi-skilled and skilled manpower. The point to ponder is if people are not given education and/or vocational training, they will never be able to have a sustainable income and remain dependent on charity.