BERNE, Switzerland: Charitable giving is part and parcel of the holy month of Ramadan for any Muslim who can afford it. Zakat, which is one of the five pillars of Islam, is levied on the property of those who meet minimum wealth standards (nisab).
In most Muslim-majority countries, zakat is voluntary, but in six (Malaysia, Saudi Arabia, Pakistan, Sudan Libya and Yemen) it is collected by the state.
When the state is well organized and zakat is applied systematically, it has the potential to become a fiscal policy instrument at the macroeconomic level, enhancing institutional capability in the social and welfare sectors. At the microeconomic level, its allocation to the needy serves income (re)distribution, reducing overall indebtedness alongside it.