There are similarities between the objectives of government development budget and the Zakat system of Islam. The primary goal of the Zakat system is poverty reduction. It declares a 2.5% share of the poor in the wealth of the rich. There are many public sector development projects that deal directly with poverty alleviation.
A huge amount of money is spent every year as Zakat. However, the money is spent in a way that does not contribute to poverty alleviation or income generation. Zakat payers usually buy low quality garments for the poor in order to cover more people with less amount of money. Although it is a charity, it does not help the poor change their income level. In many cases distributing Zakat garments results in death in stampede. If proper incentive measures can be taken for the Zakat payers, the money can be pumped into government development fund and can be utilised in a more planned way in poverty alleviation. It can also reduce our dependence on external loans. One of the lucrative incentives will be an income tax rebate.The government can even consider Zakat as alternative to income tax if it is paid in the government fund. Someone with a savings of twenty lakhs taka has to pay Zakat of fifty thousand taka. People of such wealth level do not pay more than this amount of income tax. There is an existing government fund for Zakat. However, people are reluctant to put their Zakat money in it because of the lack of transparency and confidence in our government systems. Moreover, a Zakat payer wants to pay his Zakat money to his/her poor relatives, friends and local people. The existing fund does not permit it. A former president made the worst use of it by spending the money in projects of his personal interest.
The government can take a project for collecting and using Zakat money for poverty reduction. It should have a number of income generating projects. A Shariah Council formed with leading Islamic scholars of the country should monitor that the money is spent according to Islamic jurisprudence. People want to pay their Zakat to their poor relatives. There should be an option of choosing the persons whom the Zakat payer wants to pay his/her Zakat. For example, if I am a Zakat payer, I will name the persons whom I want to pay it. The project will involve those persons in income generating projects that are available in the region where those persons live, if possible. An IT system can help maintaining this information.