Government Plans Zakat Board to Modernise Collection and Distribution
The government is moving to reorganise Bangladesh’s Zakat system, with plans for a new Zakat Board and reforms to the existing Government Zakat Fund. The initiative aims to make Zakat collection and distribution more organised and transparent, potentially giving the religious charity a larger role in poverty reduction.
In a Nutshell
- Finance Minister Amir Khosru Mahmud Chowdhury announced in Parliament on September 6 that the government is working to reform and modernise Bangladesh’s Zakat collection and distribution system.
- The Government Zakat Fund Department has operated under the Islamic Foundation since 1982, but now, on the recommendations of the Islamic Foundation, the Prime Minister’s Office has formed a high-powered committee, and work is underway to establish a Zakat Board.
- The government plans to modernise the Zakat Department and facilitate the collection of Zakat from both domestic and foreign sources.
- Zakat paid to the Government Zakat Fund can already be attached to tax returns to receive tax rebates through an NBR-linked system.
- Moreover, Zakat in Bangladesh is also collected independently by madrassas, orphanages and private organisations, meaning the government is trying to organise a system that is currently spread across many channels.
Context
While Bangladesh has maintained a state Zakat Fund for decades, collections and distributions have historically been driven by private citizens and religious institutions. To better coordinate this decentralised system, the government introduced the 2023 Zakat Fund Management Act to roll out modernised administrative reforms in phases.
The current administration views this structured approach as a critical tool for economic development. In March, Prime Minister Tarique Rahman emphasised that a well-organised Zakat distribution network could significantly alleviate national poverty over the next 10 to 15 years.
Why It Matters
Zakat already redistributes money from wealthier Muslims to those in need. So the government is stepping into a space that has historically been managed largely by individuals and religious and charitable organisations. People are more likely to use a government-managed system if they can clearly see where their money goes and who receives it. For Bangladesh, a more transparent system could help identify recipients more systematically, reduce duplication and direct funds towards longer-term needs such as education, healthcare and livelihoods rather than only short-term assistance.
What We Think
The government's challenge is not simply to collect more Zakat. It has to make people trust the system enough to actually use it.
If the new Zakat Board can provide transparent collection, credible recipient selection, free of corruption, and clear reporting on how funds are spent, Zakat could become a stronger tool for the economy. Otherwise, it risks becoming another government fund that exists on paper while people continue to rely on private channels they already trust.