Distributive Effects of zakat in Pakistan: Some empirical evidence

The objective of the study is to present the redistributive effects of zakat across the income groups and regions in Pakistan by utilizing the data collected in the Household Integrated Expenditure Survey (HIES, 1996-97), the Economic Survey (1999) and the Annual Report of the State Bank of Pakistan (1999-2000). The Net National Product (NNP) is used as the income base. The results of the existing Zakat System are not encouraging. The annual average income per household in the first income group increased in the range of 0.20 percent to 1.20 percent. This is due to the halfhearted and partial implementation of the Zakat System. However, the potential zakat collection and distribution has a significant impact on the household income in the first income group ranging from
10.63 percent to 29.23 percent. It could also affect the annual average income of the zakat payers in the range of about -1.0 percent to -6.38 percent. Therefore, zakat has its potential role but demands serious efforts on the part of the government.