Zakat-centric economy and the poor people of Bangladesh

Tasneem Islam Dyuti
Research Associate
Dr. Md. Abdur Rahim Khan
Associate Professor
Bangladesh Institute of Governance and Management

We have reached the at the very end of the holy month Ramadan. The first two eternal blessings
of Almighty Allah which are mercy and forgiveness have already ended among the three; mercy,
forgiveness and salvation. Najat or salvation phase is going on now. Najat means liberation: to
liberate, to be freed, to be set free and to set free. The main purpose of this holy month is to be free
from all kinds of pollution, defilement and sin. Along with this process of liberation, a Muslim has
to bond with Almighty Allah sincerely—by asking for his forgiveness, repentance, and prayer to
Almighty Allah day and night. In parallel, the Almighty Allah and the last Prophet Muhammad
(PBUH) have instructed every capable Muslim man and woman to take care of two financial
matters within a specific period of time through the Holy Qur’an. One of which is Zakat and the
other is Fitrah.

The main theme of this article is the economic impact of zakat and fitra on poor people in
Bangladesh. It is recommendable that, Zakat is one of the main tools for poverty alleviation and
rehabilitation. It is obligatory upon the Muslim by Allah (SWT). That’s why it is compulsory and
in no case voluntary donation. It is the right of the poor to have a fair share of the wealth of the
rich. The question is that poor people are getting the opportunity to enjoy that right in Bangladesh?
In short, the answer is — No, they are not getting that right. Some facts and figures can be cited in
support of this answer. On April 11, 2023, the Bangladesh Bureau of Statistics has published the
Household Income and Expenditure Survey (HIES) 2022. It is noteworthy that the number of poor
people in the country has decreased significantly in the last 6 years; 6 years ago, it was 12.9 percent
which is now 5.6 percent. In this regard, one more thing needs to be noted – that is – extreme
poverty has decreased by on an average of 1.3 percentage points every year from 2010 to 2016,
but the pace could not be sustained. Now the rate of reduction in the number of extreme poor
people has slowed down relatively. It is targeted that Bangladesh will join the ranks of developed
countries in 2041. If the pace of poverty reduction slows down, will it be dignified for us to join
the ranks of developed countries with so many poor people as a nation?
Another point should not be avoided. That is, the income disparity between the rich and the poor
is becoming more obvious. This trend of inequality is more in urban areas than in rural areas. We
have to bridge this gap. It has been mentioned earlier that Zakat is a special contribution of
Almighty Allah and it is a unique and excellent system of reducing poverty for deprived humanity.
If so —what is the obstacle to implement this system effectively as a resident of a Muslim-majority
country? Article 8 of the Constitution of the People’s Republic of Bangladesh lays down a strong
commitment to the principles of nationalism, socialism, democracy and secularism, together with
the principles derived from those as set out in this part and Article 19.2 states that the State shall
adopt effective measures to remove social and economic inequality between man and man and to
ensure the equitable distribution of wealth among citizens, and of opportunities in order to attain

a uniform level of economic development throughout the Republic. In fulfillment of the
commitment of the constitution, the government can play a breakthrough role in alleviating
poverty as well as eliminating social and economic inequality among people by collecting zakat
according to the provisions of Islamic law, creating funds, managing it properly and distributing it
to the appropriate people.
Hopefully, the Zakat Fund Management Act has been enacted on 31st January 2023 by cancelling
the Zakat Fund Ordinance of 1982. Section 3 of this Act contains instructions for collection and
distribution of Zakat through the Zakat Board constituted by the government. Section 7 of this Act
states that Zakat funds shall be collected from 3 sources among which the first two are (a) Zakat
paid by the Muslims and collected by the Board (b) Zakat received from Zakat money deposited
by Bangladeshi expatriates, Muslim citizens, any foreign Muslim person or any organization. Here
we will try to focus only on ‘Zakat paid by the Muslims and collected by the Board’. There is a
long analytical discussion about Zakat in the Holy Qur’an and Hadith. The most important point is
that the specific portion of wealth that is obligatory to be spent in the way of Allah is Zakat and
this Zakat is obligatory for every independent financially capable Muslim. Roughly 2.5% of a
person’s wealth and income (determined according to Zakat rules and criteria) is payable as Zakat
every year. The devout Muslim community mainly pays Zakat before Eid-ul-Fitr during the month
of Ramadan. There are detailed instructions on who to give Zakat to whom, but the most distressed,
needy, close relatives should be given the highest priority in giving Zakat and the amount of Zakat
should be such that the recipient of Zakat can be independent.
Incidentally, it may be mentioned that in 2024, according to the calculations of the National Board
of Revenue, the number of Income Tax Certificate (TIN) holders in Bangladesh is about 1 crore.
According to the information provided by Bangladesh Bank, the number of millionaire account
holders in the country is 1 lakh 16 thousand 908. These account holders include both individuals
and organizations. Among them, there are owners of thousands of crores of taka and there are also
owners of 1 crore and 2 crores of taka. For the sake of explanation, if we do a very simple
calculation and assume that an average owner of 10 crore rupees has to pay 2.5% of their income
which is 25 lakh taka as zakat every year. Accordingly, 29 thousand 227 crores taka was collected
as Zakat from 116908 people.
It is necessary to mention that 1 lakh 26 thousand 272 crores taka was allocated for the destitute
widows, disabled, vulnerable groups, breastfeeding mothers, freedom fighters, families of martyrs
and war-victims, retired Govt. in the Social Safety Net Program (SSNP) from the Government of
Bangladesh in the financial year 2023-24. So, it appears that if Zakat is paid, collected and
distributed properly, a very effective program can be undertaken outside the government for the
poor and vulnerable people. The Zakat Board under the Islamic Foundation has clearly mentioned
the principles of Zakat collection and distribution. There are also specific instructions on who
should pay Zakat. The strongest aspect of Zakat management and administration is that all the
expenses related to the salaries and allowances of those who will be engaged in the collection of
Zakat can be met from the money collected from Zakat. A lot can be done to improve the quality
of life of the extremely poor people of Bangladesh whose number are around 10 million by
inspiring the wealthy religious Muslim brothers and sisters. Among the beneficiary, the creation
of numerous small and medium entrepreneurs can be started with Zakat money. It is not a dream
or an imaginative plan. If the public and private sectors, especially the religious leaders forget the

narrowness of ‘madhab’ and come forward in this matter, then a new trend can be created in the
economic activities of Bangladesh, but in this case the Ministry of Religion and the Islamic
Foundation have to come forward officially.