During Ramazan, Pakistanis dodge tax collectors
In this picture July 20, 2012 file photo, a Pakistani woman gives money to an owner of a restaurant to provide food to poor people during Ramazan in Rawalpindi. – Photo by AP
KARACHI: During the Muslim holy month of Ramazan, Muhammad Tashfeen Khan does what millions of other Pakistanis do: tries to keep his money from the government’s religious tax collectors.
The wealthy businessman pulls all his savings from his bank account right before Ramazan starts so the government cannot deduct 2.5 per cent as zakat, the annual donation many Muslims are religiously required to make as a basic tenet of the Islamic faith.
Khan and many other Pakistanis do this, not to avoid paying zakat, but to make sure the money doesn’t go to the government, which is viewed by most people as incompetent and corrupt.
For many years, Pakistan required all Sunni Muslims, who make up a majority of the country’s population, to pay zakat straight to the government. That regulation changed recently, but many Pakistanis seem unaware and continue to pull their money out of the banks to elude the state.
Instead, they pay zakat to needy individuals and hundreds of private charities operating in the country _ some of which are actually fronts for militant organisations seeking money for both social welfare activities and militant activity.
”When it comes to zakat, or any other religious issue, I can’t trust the government,” said Khan, who runs a chain of private schools in the southern port city of Karachi. It’s a ”corrupt system, which hardly cares about the poor,” he said.
A former religious affairs minister was imprisoned last year for allegedly cheating hundreds of thousands of Pakistani Muslims out of money while they were making the annual Hajj pilgrimage to Saudi Arabia.
Khan said he gives over $1,000 to individuals and private charities every Ramazan, an amount he indicated was greater than what he would pay if the government deducted zakat from his bank account.
Ramazan began in July and is expected to end in the next few days, depending on the sighting of the new moon.
”By taking matters in my own hands, I am satisfied that it goes to the deserving people and charity organizations,” said Khan.
Many Pakistanis apparently feel the same way, and use his same bank trick, based on evidence from how much the government collects in zakat from bank accounts versus how much money is in those accounts.
Last year, the government collected a little over 1 billion rupees ($11.5 million) from savings and fixed deposit accounts at the beginning of Ramazan, said Syed Wasimuddin, the spokesman for the State Bank of Pakistan.
That figure equals only about 0.3 per cent of the 320 billion rupees ($3.4 billion) that was in those accounts in June 2011, before Ramazan started, according to data posted on the State Bank’s website _ far below the official 2.5 per cent zakat tax rate.
Some of the difference can be attributed to the money in accounts owned by non-Muslims and Shia Muslims, who make up about 25 per cent of the population and are exempt from paying zakat, as long as they provide the government with proof of their religious affiliation.
Pakistan made the payment of zakat to the government mandatory for Sunni Muslims in 1980 under the military dictator Gen. Zia-ul-Haq, one of a variety of actions he took in an attempt to make the state more religious. The government has allowed Sunni Muslims to file a certificate of exemption in recent years, but knowledge of the change doesn’t seem widespread.
The way zakat is handled varies among Muslim countries. In Turkey, zakat is voluntary and is not paid to the government at all. It is also voluntary in Iraq, but the process is handled by government departments that manage religious affairs for Sunnis and Shias. Zakat is mandatory in Malaysia and is collected by the government, but the law is generally not enforced against those who don’t pay. Payment is also mandatory in Indonesia, but donors can give money to either the government or private organisations.
Bashir Farooqi, chairman of one of Pakistan’s largest private charities, the Saylani Welfare Trust, said the group collects more than $10 million every year from zakat and uses it on projects that range from free meals for hundreds of thousands of people to interest-free loans to jobless men trying to set up their own businesses.
”How can one trust the government?” said Farooqi. Another big recipient of zakat payments every year is Jamaat-ud-Dawa, which is widely believed to be a front organisation for the banned militant organisation Lashkar-i-Taiba, although the group denies this.
Lashkar-i-Taiba militants are blamed for attacks in the Indian city of Mumbai in 2008 that killed over 160 people.
”We spend millions of rupees every year for the education of the poor, health projects and reintegration of disaster-hit victims,” said Jamaat-ud-Dawa spokesman Yahya Mujahid.
The Pakistani government often claims that it is cracking down on banned militant groups, but many continue to raise money and operate without official interference.
Deduction of an amount equivalent to 2.5% of the total outstanding balance in the bank accounts by government as a mandatory Zakat is a new thing to me. This is unfair . first the amount outstanding balance in the bank account do not reflect the amount earned by the person and it should be left on the account holder to spend the money as zakat as per his/ her choice . such provision only tends to activate the withdrawal of money from the anks just before Ramazan and it is quite natural. If it is termed Tax then the tax system is rubbish .
Government is made of people and incompetent or corrupt goverment means incompetent and corroupt people. Decieving one's own government means decieving the entire nation. Unite not divide because strength is in unity.
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Can someone please clarify.
Can the Govt in Pakistan during ramzan withdraw 2.5 % of whatever is in the bank without reference or permission of the account holder ?
The writer misled the people through wrong Title, Zakat is not a Tax and people are not suppose to pay to Government. Its a religious duty to be performed by able muslims. Force Zakat collection by Goverment is imposed by Late Dictator Zia ul Haque. Appreciate if someone from Dawn do a proof reading before publishing misleading articles.
What able Muslim???????? Every one of you is crook one way or the other. Muslims are butt of the joke of the world.
Nobody wants to have house next to you. One Pakistan and three Eids, what a joke!
People are corrupt and the government is even more corrupt.
People in Pakistan need extra cash to spend on EID shopping (day and night).Just an amount of $1000 (as charity) by such a big Pakistani trader is just peanuts.Only single Overseas Pakistani donate a lot more than $1000 (as charity) in this month.Even non muslim countries like US or UK sends a lot more on the name of AID to Pakistan every year.Its a case of tax evasion by Pakistanis.This govt is a democratic govt and we people bought them in power.
Saving bank accounts are not allowed in Shariah, as well paying charity from the money earned in the form of bank interest.
Saving bank accounts are not allowed in Shariah, as well paying charity from the money earned in the form of bank interest.
Pakistanis dodge others all the time, ramazan is no exception.
That is a generalization. This could be said about any country.
The government of Pakistan is not an Islamic State. According to Shariat, it has no right whatsoever to collect Zakat.
true my poiint of view is same. our banking system is not based on shariat so why we give money to them. n second its wrong thaat we did it coz v r not going to givve our zakat its just coz v dont trust on govrnment so v do it by ourselves Alhamdu Lilah.
and what ever taxes govt collects are spent on personal luxuries of rulers, to fill in their treasuries. So what is use of a zakat that is compulsorily deducted from bank account?
The government of Pakistan is not an Islamic State. According to Shariat, it has no right whatsoever to collect Zakat.
Moreover those who give Zakat to banks and believe that they have fulfilled their respectability towards Allah are the biggest fools in the land.
Why do people vote for the government when they dont trust them and govt decisions?Its simply tax evasion, corrupt mentality and lust of money by public.
Who else can they vote for.Even Imran Khan has been avoiding taxes. The people want the government to provide them with good roads, electricity, hospitals, etc. but do not want to pay taxes.
What do you expect the govt. to do. So the Govt goes to the USA with a begging bowl.
What proof do you have that Imran Khan has been avoiding taxes
everyone knows
thats right, everyone knows, if your a Sharif or a Zardari. Just like the country is doing really well, whats all the fuss about, yeah?
An absolute grandeur of delusion and sense of moral proprietary!
I guess all the tax evaders also think the same and hence are morally obligated to not pay taxes to government.
An article that tries to contain many things under a really wrong title. "Zakat" is not a TAX. So how can Muslims "dodge the tax collectors". Secondly why Jamat-ud-dawa history is discussed in this topic. Pretty low grade reporting from Dawn.
Would any kind hearted, honest person think of this scheme? In the next Ramadan, collect money and save. And then start a small business. And then give it to someone to run it and feed a few families. You can also make a factory and run it and feed dozens, maybe, to start with. The idea is that: don’t give fish to a hungry man, teach him to fish. This is not my idea. My idea is that don’t give them charity, give them prosperity. That will build a greater monument. Making one family prosperous is hundred times better than feeding a lunch to ten thousand people.