Zakat: A Religious Duty Not in Confrontation with State Fiscal Laws
Keywords:
Zakat, Taxation, Income Tax Ordinance 2001, Section 60, Section 7E, Zakat and Ushr Ordinance 1980, Islamic fiscal policy, Maslahah, Fiscal compliance, Shari’ah and taxation, Documented giving, Public finance in Pakistan, Informal economy, Strategic tax evasion, State fiscal legitimacy, Gender and zakat, Tax-to-GDP ratio, Comparative zakat systems, AAOIFI, Sustainable Development Goals (SDGs)Abstract
Zakat, the venerable obligation, is not the enemy of taxation—it is its elder cousin in moral duty. One springs from conscience, the other from law. And when both walk hand in hand, the fiscal house stands firmer. This paper contends that in the modern state, the problem is not that zakat clashes with taxation—it is that citizens pretend they do, to avoid both. The Income Tax Ordinance, 2001 offers a bridge in Section 60: zakat, when paid and documented, can be deducted (Government of Pakistan, 2001). But hardly anyone crosses it. Why? Because the public distrusts the state. Or so they say. In truth, they fear documentation more than they fear God or Government. They hoard wealth in real estate and gold, whispering piety while avoiding paper trails. Now consider Section 7E—a deemed income tax on immovable property. Just 1%. Yet many would rather pay that than zakat’s 2.5%, were the choice offered. What does this reveal? A curious inversion: when religion demands more, the State is welcomed as the lesser burden. Here lies the crisis—fiscal faith falters not due to doctrine, but due to deliberate concealment (ICTD & LUMS, 2023). This analysis draws on both black-letter law and hard data. From the Zakat and Ushr Ordinance, 1980 to the Income Tax Ordinance, 2001, and from FBR records to citizen behaviour, we examine the hollow rhetoric of religious evasion. Scholars such as Dr. Mahmood Ahmad Ghazi argue that the Islamic state retains sovereign authority to tax beyond zakat under the principle of maslahah—public interest (Ghazi, 2013). Justice (R) Taqi Usmani similarly supports the imposition of modern taxes, provided they serve collective welfare and are not oppressive (Usmani, 2002). Even secular theorists like Rawls affirm the moral necessity of fair taxation as a condition of justice (Rawls, 1971). Our claim is bold but measured: far from threatening the integrity of state revenue, zakat—when made visible—legitimises it. The answer lies not in abolishing one for the other, but in integrating both through transparent policy, statutory harmonisation, and civic honesty. Zakat and tax need not quarrel; it is we who must cease to pit them against one another.