Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Being one of the five pillars of Islam, it is critical to mobilise Zakat properly so that the ultimate objective of obligatory charity can be achieved. And the objective is to reduce poverty in society by a balanced distribution of wealth. Islam upholds the principle of an egalitarian society and strongly discourages concentration of resources into a few hands. According to the Quran, Zakat money has to be given to the poor, the needy, those in debt' as a ransom for captives (prisoners of war), the wayfarers, the officials appointed in connection with the collection of Zakat, those whose hearts are to be harmonised by material support and in the way of Allah. [Quran. 9:60]
Zakat is profoundly significant in Muslims' lives. On the one hand, it is a means of spiritual purification and, on the other, a way to regain balance and equilibrium in social and economic life.
Though Zakat is traditionally mentioned with the methods of prayer of Islam, it is a part of the socio-financial system of Islam. It is also considered a key Islamic fiscal tool that is used to transfer resources from rich and affluent Muslims to poor and needy Muslims. In this process, Zakat unites the poor and the wealthy through a bond of love and respect. This is because, as former Cambridge faculty member, Syed Ali Ashraf explained, "Zakat payers are not doing a favour to the poor; on the contrary, by accepting Zakat, the poor and the needy are bestowing a favour on the rich." [P-17, Islam, Cambridge, UK; 1998]
Any Muslim who possesses the Nisab equivalent of wealth for one Islamic lunar year is eligible to pay Zakat. Nisab is either 87.5 grams of gold or 613 grams of silver. Also, Nisba of financial assets are subject to Zakat. Some Islamic scholars prefer 85 grams of gold or 595 grams of silver as Nisab. There is also a difference in opinion regarding the Nisab of financial assets. Some argue that it should be a silver standard, while others argue for the gold standard. (A detailed discussion is available in the column for last week, March 24, 2024). Muslims have to pay at least 2.5 per cent of the Nisab quantity or more of the wealth in their possession as Zakat annually.
Based on the orders in the Quran, coupled with the practice and instruction of Prophet Muhammad (PBUH), Islamic scholars have developed some comprehensive guidelines to collect and distribute Zakat. However, these guidelines are not exclusive, which means there are some differences of opinion among the scholars regarding various dimensions of Zakat. Nevertheless, they are the same when it comes to the optimal distribution of Zakat, and this is the most challenging part of overall Zakat management. In other words, the inability to identify and validate the Zakat recipients transparently and conveniently is a big constraint to making the distribution of Zakat optimal.
The principle of Zakat underscores the collective mobilisation of Zakat through institutional arrangements, although there is no bar to distributing Zakat individually as it is primarily an obligatory charity for individuals. So, a Zakat payer can either identify the recipients and then distribute it to them personally or appoint an agent to distribute it on their behalf. It is also possible to give the Zakat to the local authority or authorised organisations to distribute it to eligible recipients. Collective mobilisation is necessary to transfer Zakat in a better manner so that more people can benefit in the long run. In a Muslim state or Muslim-majority country, the government has a Zakat management body or unit to collect and distribute Zakat properly. Last year, the national parliament passed the Zakat Fund Management Act-2023, replacing the Zakat Fund Ordinance, 1982, to streamline the Zakat collection and distribution under government management. As per the act, a new Zakat Board has been formed to do the work, although the overall progress is yet to get momentum.
Besides the government fund, several non-government charitable organisations have been working to mobilise Zakat in the country, and some are quite old, like Anjuman Mofidul Islam. Some other leading organisations working to collect and distribute Zakat include Dhaka Ahsania Mission, Centre for Zakat Management, As-Sunnah Foundation, and Quantum Foundation. It is visible that non-government charitable organisations are mobilising much more Zakat than the government body, mainly due to better management. These organisations utilise the collected Zakat for various purposes, such as job creation, hunger reduction, education, health service, and rehabilitation.
One of the core principles of Zakat is to do obligatory charity so that the recipients of Zakat do not need to receive it again within a couple of years. This means Zakat money will help the recipients get out of dire situations by providing them with jobs, creating other income sources, and supporting them in getting rid of poverty. Without an institutional effort, it isn't easy to utilise the Zakat money in such an efficient way. Over the years, the institutional mobilisation of Zakat has gone up, and many Zakat payers are relying more on these charitable organisations to pay their due Zakat. Though the old tradition of distributing some clothing and food among the poor in the name of Zakat is still there, many have already got out of the flawed practice.
As institutional effort has paced up to make optimal use of Zakat, it is necessary to encourage the effort through awareness building and policy support. For instance, the payment of Zakat is tax-exempted only for a few organisations. The facility may be extended to more organisations based on the performance and transparency in Zakat mobilisation. This will encourage more people to pay Zakat institutionally. The organisations will also be encouraged to do better work to make the distribution of Zakat more efficient.