Pakistan “misplaces” 7 percent of its revenues

October 22, 2009

An awfully understated article from Pakistan’s Daily Times yesterday revealed 13.5 billion rupees worth of “irregularities” in an audit of Pakistan’s zakat fund.  Here’s the full text:

Islamabad—The Auditor General of Pakistan has pointed out irregularities worth billions of rupees in the accounts of Central Zakat Fund (CZF) and public health institutions during the financial year 2007-08. In his report for the audit year 2008-09, the AG observed that the figures reported to the State Bank of Pakistan by the CZF differed by Rs 13.475 billion from the actual amount spent by the fund. The report said the CZF had also failed to produce the record of expenditure worth Rs 11.31 million and had transferred zakat funds worth Rs 23.5 million from accounts of the Health Welfare Committee (HWC) to the accounts of the Al-Shifa Trust Eye Hospital in Rawalpindi without authorisation. The AG said the HWC had purchased medicines worth Rs 56 million without transparent bidding and had issued medicines worth Rs 313,938 on “doubtful prescriptions”.

Let’s back up.  A government run zakat fund, you ask?  Isn’t zakat private charity (as explained in warm & fuzzy definitions like this one)?  Sometimes it is, but zakat is more accurately described as Islam’s 2½ percent wealth tax.  In much of the Middle East, this tax is collected privately from individuals and given directly to local Islamic councils or charities.  Pakistan, however, has a fully Islamized system of government-run religious taxation.  This means that Pakistan’s government collects and redistributes the zakat, and is a real “tax” in every sense of the word.

All the more reason for alarm if you’re a Pakistani taxpayer reviewing the results of your government’s zakat audit.  To put these “irregularities” in perspective, 13.5 billion rupees are the equivalent of 1.62 billion U.S. dollars.  Pakistan’s total revenue in 2008 was only 22.3 billion U.S. dollars (see CIA World Factbook).  That means that 7 percent of Pakistan’s total revenues could not be accounted for.

If losing this much money barely makes the news, imagine what else is being done with zakat revenues in the world today.


  1. […] Pakistan “misplaces” 7 percent of its revenues […]

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