KARACHI, March 16 The overall collection and disbursement of zakat in Sindh has been falling over the years because of a lack of public trust in its right use, officials said.

The system of zakat and ushr was introduced through an ordinance in June 1980. The zakat funds are utilised for assistance to the poor particularly orphans and widows, the handicapped and those affected or rendered homeless by natural calamities.

However, the real objective of helping a recipient stand on his own feet and eventually become a contributor of zakat has not been met because a major portion of zakat is disbursed in the form of subsistence (Guzara) allowance.

According to the Zakat & Ushr Ordinance, 1980, zakat is collected by banks and financial institutions on the valuation date of each zakat year (1st Ramazan). Currently more than 2,700 zakat collection controlling agencies, including 60 banks/financial institutions and private limited companies, are authorized to deduct and deposit zakat in the Central Zakat Council.

In Sindh, there are 23 District Zakat and Ushr Committees and 7,069 Local Zakat Committees, which are working under the Provincial Zakat Council (PZC).

The Central Zakat Council allocates zakat funds to the provinces on the basis of their population. The zakat funds are released in two equal instalments and the second instalment is released only after the utilisation of at least 50 per cent of the total amount of the first instalment.

Every year the federal government gives about Rs850 million to the PZC in addition to Rs50 million to be disbursed among deserving people as Eid and the Ramazan allowances.

However, PZC Chairman retired Justice Zahid Kurban Alvi told Dawn that a substantial amount of the zakat fund lapsed and could not be disbursed due to a late receipt from the federal government. He emphasised the need for early allocation of the zakat fund and doing away with the present system of lapsed amount on account of non-utilisation.

Mr Alvi told Dawn that the overall collection and payment of zakat in Sindh was falling because of a lack of public trust in its right use and the provision of submitting affidavits to evade deductions of zakat by the banks and some other facilities which the bank were providing to their clients on the eve of its deduction.

Ushr collection comesto a halt

He said that after 1999 not a single paisa was collected against ushr in the province, although according to the law department of the provincial government “Ushr is part of zakat therefore it should be treated as such”.

He emphasised the need for amending the Zakat and Ushr Ordinance, 1980.

Although Sections 5 and 6 of the Zakat & Ushr Ordinance, 1980, authorise the provincial revenue department to assess and collect ushr in respect of a landowner, grantee, lessee, leaseholder, etc, the trend of collection of ushr, which remained on the decline from 2001, and has now come to a standstill.

At present, a major chunk of the zakat fund is utilised in providing a subsistence allowance to deserving people, who are selected by their respective Local Zakat Committees on the criteria of being the poorest of the poor and Rs500 per month is paid to them as a financial assistance by the Local Zakat Committee concerned, subject to the determination of their privilege (istehqaq).

Critics say that the real problem is faced at this stage because the process of preparation of the lists of the deserving people and the determination of their privilege was not transparent at this level.

There is a need to revamp the system not only by enhancing the amount, but more essentially by revising the disbursement procedure.

There is also a need to ensure the selection of a deserving person through a wide- ranging consultative process, subject to the revision every year or after every instalment. Payment may be made through an automated system by eliminating human intervention. Single criterion for being eligible for a subsistence allowance may be introduced.

At the moment a debate is going on whether to disburse zakat to institutions, instead of individuals, so that the fund is used for a community`s welfare.

Justice Alvi said that with an effective monitoring mechanism, this would have a long-term effect. These institutions could include hospitals, educational institutions, etc.

Imbalance in zakat disbursement

The PZC chairman also referred to the imbalance in disbursement of the zakat funds to the students of schools, colleges and religious seminaries. Educational stipends are also extended to students from primary to university and professional colleges. From primary to middle it is Rs75 per month per student; high school Rs112 per month per student; intermediate and graduate level Rs375 per month, postgraduate level Rs750 per month, engineering, medical colleges and engineering universities Rs874 per month per student and Rs874 computer sciences students.

Funds are also allocated for the stipend, clothing, food items, books, etc of the deserving students of religious seminaries. Hifz-o-Nazra student of religious seminaries are given Rs501 per month; Rs375 per month for Mauqoof Able; Rs 750 per month for Doure Hadith.

In addition, an amount equal to the half of the total stipend is provided to the seminary administration for meeting expenditure to be incurred on clothing, food items and books, etc of the students. This was despite the fact that no such benefits are provided to students who are studying in institutions that teach many other and modern subjects.

Khalid Lateef, the chairman of the district zakat and ushr committee, Karachi, said that the old procedure of payment of education stipend to the students of the religious seminaries must be reintroduced i.e. financial assistance should be made directly to the students of religious seminaries through crossed cheques instead of cash, either in the name of the deserving student or his/her parents/guardian. The financial assistance to the religious seminaries must be made conditional to the students adopting modern courses under government`s policy, he added.

He maintained that a monitoring system with close liaison with the district committee should be introduced to check whether all seminaries were engaged in providing constructive education and upbringing of their students.

Need to increase allocation

Mr Lateef said that the educational stipends being provided to deserving students from primary to university level should also be reviewed.

It has been suggested that stipends at primary level should be incentive-based to ensure continuity in the education of children of the poor families.

The ratio of stipend for education at colleges and universities level may be increased, enabling poor students to obtain the so-called professional education. Educational Stipends Committees may be set up at the district level having representation from the education department, the local administration, the district zakat committee and a public representative.

Financial support at colleges and universities level must be of inclusive nature whereby all fee, hostel charges, book purchasing, and living charges may be paid to the selected students from the zakat fund until he or she attains the final degree/certificate after being selected for financial assistance.

In the context of assistance from the zakat fund for health care, Mr Lateef said that there was a need for sufficiently increasing the amount for outdoor and indoor patients. Adequate budget may be placed at the disposal of the PZC for release to hospitals on a need basis. Being an expensive treatments special allocations for Hepatitis (all categories) and Aids patients may be earmarked. The overall allocation from the current six per cent may be doubled to 12 per cent under the health sector, he added.

He also maintained that the marriage assistance should be increased to Rs20,000 as the current amount of Rs10,000 was insufficient.

Need to include activists in zakat committees

The chairman of the district zakat committee said that the system needed to be made more democratic at all levels.

He said in order to ensure transparency, effective collection and disbursement it was proposed that local representatives/political workers and human rights activists may be associated with the zakat committees at the district and local level.

Mr Lateef believes that for enhancing the net of zakat collection, the private sector and citizens may also be involved in creating a sense of trust in the efficacy of the zakat system.

He said that the chairman of a district zakat and ushr committee, with the approval of the PZC, be authorised to carry out re-appropriation of the zakat funds whereever necessary according to the number of eligible deserving persons in any specific heads(s).

He suggested that 10 per cent of the total allocation at the district level may be placed at the disposal of the district chairman for assistance in emergency cases. Stipends to deserving students may be placed at the disposal of respective educational institutions for distribution among deserving students in accordance with their needs, he added.