Pakistan: where religion takes a bite out of your paycheck

KARACHI, Pakistan — Living in an "Islamic Republic," I shouldn't expect there to be a separation of religion and government.

But when I run up against religiously imposed rules, I'm consistently shocked, anyway.

For example, it was only at the beginning of Ramadan this year that I learned it's illegal for any establishment to serve food during the holiday while the sun is in the sky. If you're not Muslim, choose not to fast, or are pregnant, nursing or traveling — all valid religious reasons for not fasting — you're unable to get food, because … that's the rule.

My confusion about this law was eclipsed, however, when I learned about Pakistan's "zakat laws." Like fasting for Ramadan or praying five times a day, zakat is a basic component of Islam — one of the five pillars that make up the foundation of the religion. According to the Quran, every Muslim capable is required to set aside 2.5 percent of their capital assets to give to charity. In most Muslim states, this is voluntary, although many have a centralized government bureau that handles distribution of the funds.

That's not how it works in Pakistan. In the 1980s, when Pakistan was ruled by a fervently religious military dictator, Zia ul-Haq, the country passed an ordinance that allowed every bank to deduct zakat from any interest-bearing accounts. Now, every year on the first day of Ramadan, banks shut down to remove the money and place it in a government account for alms-giving. This includes international banks that operate in Pakistan, which are bound by the same laws as local banks.

I find the fact that my bank can morally police my account pretty astounding, but here's the part that really gets me: it's the people with the least to give that end up most impacted.

Banking officials tell me that the law is flouted by savvy clients before the money even ends up in the hands of the government. Before Ramadan, most people remove their funds from savings accounts that accrue interest, depositing them instead into non-interest-bearing accounts so that the bank isn't able to seize their money. Others choose to write themselves a pay-order for the entirety of the amount in their account, depositing the money back after Ramadan is over.

It's not that people don't want to pay zakat; rather, they want choice over how it's spent. Most people are deeply religious and believe it's their islamic duty to pay the charity tax. So they'll find a way around the bank rule and write the donation directly to an organization they believe in — fulfilling their religious obligation, but leaving the government out of it.

There are quite a few Pakistanis, though, who possess mandatory bank accounts and have only a rudimentary understanding of how to operate them. Many of those making minimum wage as peons, janitors, or messenger boys work for corporations that require them to set up a bank account when they're hired. Employees who can't read or write might simply be taught how to write a check and make a deposit. There's a good chance they never even know the zakat money is being taken away from them, let alone how they could exercise some control in the system. Because they don't know how to get around the law, these people end up having to follow it.

Two years ago, the Central Zakat Admistration was accused of severely mismanaging the country's zakat funds, which surprised no one. (Pakistan is not known for good governance. Transparency International gives the country a score of 27 out of 100 in its 2012 global corruption index.) Perhaps it's for this reason that around the same time, Pakistan allowed an exemption program. Now, before Ramadan, you can opt out of the program by filling out a form and submitting it to your bank.

Again, the group with the most modest incomes is the one least likely to know about this form or how to fill it out.

It's an imperfect system.

When I suggested to a young teller at a Karachi bank that perhaps it'd make more sense that we run the system the opposite way, allowing people to opt into a program of auto-debited zakat, he looked at me with concern. "Well," he finally said, as though my idea was the stupidest thing he'd ever heard. "Who on Earth would let the banks do that?!"