Banks deduct Rs 11.77 billion Zakat as Ministry says provinces handle distribution

Islamabad: More than Rs 11.77 billion in Zakat was collected through banks during 2024-25, but the federal Ministry of Poverty Alleviation and Social Safety has said it has no role in deciding how the money is later allocated, managed or distributed once funds are released to the provinces and other areas.

The disclosure came in a written reply to a question by MNA Aliya Kamran, who sought details of Zakat deducted by banks and information about where the collected amount was deposited.

Minister for Poverty Alleviation and Social Safety Syed Imran Ahmed Shah said all banks and financial institutions are required to deduct Zakat under Section 3 of the Zakat and Ushr Ordinance, 1980.

According to the reply, the deducted money is deposited into the Central Zakat Account, known as CZ 08, which the State Bank of Pakistan maintains.

The State Bank provides the ministry with consolidated figures showing the total amount of Zakat collected each year.

For 2024-25, the total collection was stated at Rs 11,770,557,146.90, equal to more than Rs 11.77 billion.

The reply said figures for 2025-26 were to be provided by the State Bank to the ministry after the close of the financial year.

The ministry further explained that after the devolution of Zakat, provinces enacted their own Zakat laws and became responsible for designing Zakat programmes and distributing funds to eligible people.

Distribution is carried out through District Zakat Committees and Local Zakat Committees.

The federal ministry said its responsibility is to release Zakat funds to provinces and areas in bulk after approval from the Prime Minister.

After that stage, the ministry has no role in the allocation, management or distribution of the money at the provincial or area level.

It also said the ministry does not directly distribute Zakat to beneficiaries including widows, orphans and other eligible recipients.

The reply therefore places responsibility for the final use and distribution of Zakat funds on the provincial and local Zakat system after the federal release.

The question was laid before the National Assembly after having been deferred during the 27th Session.