KARACHI - The Sindh Zakat & Ushr Department has demanded the federal Ministry of Religious Affairs to enhance its share equivalent to that of its contribution in the overall collection and recovery of Zakat funds, it has been learnt.

According to a Sindh government official, the province’s contribution in the collection of Zakat is higher than that of the other provinces, but the federal ministry contradicts its claims. And likewise, the federal Zakat council had claimed that Sindh’s contribution was only 16 per cent annually which, according to the provincial Zakat Department, was much lower than the actual figure.

“The Sindh government contents that when its contribution in the national tax collection was nearly 70 per cent, then how its contribution in Zakat collection could be around measly 16 per cent. The province has called for a review of the existing Zakat distribution formula and an increase in its share in accordance with its actual contribution, which is over 50 per cent,” said the official, who spoke on the condition of anonymity.

After the federal Zakat council was abolished under the 18th Amendment, added the official, the State Bank of Pakistan transferred the accounts to the name of the federal Ministry of Religious Affairs.

“Following this, Sindh called on the Centre to devolve the authority of Zakat collection to the provinces (or increase its share of Zakat funds, to be disbursed among the needy, indigent and poor). Both the federal and provincial ministries have got into an argument since.”

A meeting, held here four days ago with Federal Minister for Religious Affairs Syed Khursheed Ahmed Shah in the chair, decided in-principle that the federal government would continue with the collection of Zakat for a period of next two years, 2015-16. “As the provincial chief secretaries stick to their respective positions and made their own claims of share in the collection of Zakat, it decided to uphold the existing system for a transitional period of two years,” the official, who is also a member of the Sindh Zakat Council said, adding that “in the meantime, the federal ministry and the provinces would try to work out a viable mechanism at the provincial level as regards the collection of Zakat”.

It may be noted here that the subject of Zakat was devolved to the provinces, but like other many subjects, implementation on it is in doldrums for the past two years. As per the federal religious ministry’s statistics, Punjab’s contribution in Zakat collection is 44 per cent, Sindh’s 16 per cent, while the remaining is collected by the other provinces.

The official also said that tax collection had not been on the expected lines in the outgoing financial year of 2011-12, compared to the sum of Rs3 billion collected in 2010-11.