Welfare Potential of Zakat : An Attempt to Estimate Economy Wide Zakat Collection in Pakistan

Salman Ahmed Shaikh

doi:10.12816/0051155

Article Details

Welfare Potential of Zakat : An Attempt to Estimate Economy Wide Zakat Collection in Pakistan

Authors:

Salman Ahmed Shaikh

Publisher:

Islami Bank Training and Research Academy

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

Journal of Islamic Economics, Banking and Finance 2017 Vol.13 Issue 1, pp.52-70

Document Type:

Article

Publication Date:

3/2017

Document Language:

English

Document ID (Org No.):

128750

Frequency:

Quarterly

pISSN:

20704658

DOI:

10.12816/0051155

Descriptors:

Keywords:

Abstract:

 Islamic economics literature is rich in highlighting the welfare potential of Zakat, but very few empirical studies have undertaken the quantitative estimation of potential Zakat collection. In this study, we attempt to estimate potential Zakat collection at economy wide level to explore the welfare potential of the institution of Zakat in Pakistan. We attempt to estimate economy wide Zakat collection by including heads like Zakat on agriculture produce, value of livestock, tradable inventory, currency in circulation, foreign exchange reserves, estimated gold and silver deposits and financial assets like investments in National Savings Scheme (NSS), mutual funds, stock market capitalization, pension schemes and remunerative bank deposits. Our estimates suggest that approximately Zakat collection in Pakistan could reach up to 7.25% of GDP depending upon which approach is used to institutionalize Zakat in the economy. We argue that the Zakat collectible can be adequate in effectively dealing with poverty gap funding deficit in Pakistan. We also discuss that the institution of Zakat system can also have positive effects on capital formation and economic stabilization.

Article Details

Welfare Potential of Zakat : An Attempt to Estimate Economy Wide Zakat Collection in Pakistan

Authors:

Salman Ahmed Shaikh

Publisher:

Islami Bank Training and Research Academy

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

Journal of Islamic Economics, Banking and Finance 2017 Vol.13 Issue 1, pp.52-70

Document Type:

Article

Publication Date:

3/2017

Document Language:

English

Document ID (Org No.):

128750

Frequency:

Quarterly

pISSN:

20704658

DOI:

10.12816/0051155

Descriptors:

ISLAMIC BANKING

FINANCIAL POLICY

ALMS TAX

WELFARE ECONOMICS

MACROECONOMICS

PAKISTAN

ZakāT

Welfare

Fiscal Policy

Public Finance

Issues

Article Details

Authors: Salman Ahmed Shaikh

Publisher: Islami Bank Training and Research Academy

Main Topics: Islam, Bábism & Bahá"í Faith

Journal: Journal of Islamic Economics, Banking and Finance 2017 Vol.13 Issue 1, pp.52-70

Document Type: Article

Publication Date: 3/2017

Document Language: English

Document ID (Org No.): 128750

Frequency: Quarterly

pISSN: 20704658

DOI: 10.12816/0051155

Descriptors:

Issues

Authors:

Salman Ahmed Shaikh

Publisher:

Islami Bank Training and Research Academy

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

Journal of Islamic Economics, Banking and Finance 2017 Vol.13 Issue 1, pp.52-70

Document Type:

Article

Publication Date:

3/2017

Document Language:

English

Document ID (Org No.):

128750

Frequency:

Quarterly

pISSN:

20704658

DOI:

10.12816/0051155