Articles on Islamic Economics

Issues in the Implementation of Ushr in Pakistan

Syed Hassaan Ali

Ushr is the financial obligation levied at the rate of 10% on agricultural output in Islam. There are several hurdles and issues which are hampering its successful implementation in Pakistan. This article attempts to discuss those issues and a few recommendations to overcome them.

The major issue is that the government has not been active in the collection of Ushr. Furthermore, historically, it never achieved its true potential in terms of the amount collected due to the trust deficit between the government and the landowners. It is also a fact that some greedy landlords try to evade it. On the other hand, poor knowledge about Ushr among the landowners results in the meager collection of Ushr at the national level.

Furthermore, corruption is also a major hurdle in exacerbating trust deficit between the government and the landowners. People tend to think that if they would pay their religious financial obligations to the government, then, they might be spoiled or misused.

Another problem is that usually landowners are not aware of the commandment of Ushr. There is a lack of initiatives for public awareness regarding Ushr. In the poverty alleviation programs, the government ignores the potential of Ushr collection as a tool for poverty reduction. Even if there is no agricultural income tax levied by the government, Muslim landowners engaged in agricultural production are required to pay Ushr on their agriculture produce. But, many of the landowners are not aware of this requirement and the procedure to determine their true financial obligations and the mode of payment.

On the other hand, low levels of collection of wealth Zakat and Ushr in the Muslim countries is due to the fact that governments have resorted to taxation and have pretty much disengaged from the central collection of wealth Zakat and Ushr. Now, a person defaulting on tax can be penalized, but a defaulter on Islamic financial obligations is not penalized by the government. Another reason of low central collection is the administrative hassle in the government departments which entice people to pay their financial obligations privately and without having to disclose their wealth and income status to the tax officials.

To change matters, some recommendations are listed below:

  • Raising awareness about the obligation of Ushr at the grass-root level in rural areas using different local platforms, such as Friday Sermons.
  • Moreover, the governments of Muslim majority countries may provide tax credits to those who pay Zakat and Ushr. Targeted subsidies in the procurement of seeds, fertilizers, tube-wells, pesticides and agricultural financing can also be provided to incentivize commitment.
  • Ensuring the transparent collection, monitoring, reporting and disbursement in the overall system of Zakat and Ushr administration is vital.
  • In the long term, when it becomes a tradition and a well-known financial obligation, then defaulters of Ushr should be penalized.

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