The centre for tax analysis in developing countries

Overseas Development Institue Institue for Fiscal Studies

Analysing the fiscal incidence of religious taxes and transfers

This research responds to the growing interest in ‘informal’ taxes and transfers in developing countries and their relationship to household taxation and social protection. Building on our research on the scale and impact of informal taxes and transfers, such as the analysis of informal taxes and transfers in Rwanda, we explore how this analysis can be applied to religious taxation.

The aim of the study is to provide illustrative context to inform the development of fiscal policy in Islamic countries by expanding analysis of fiscal incidence to include the effects of religious taxes and transfers.

Zakat and fiscal incidence

This project aims to address a range of empirical questions:

  • What is the incidence of religious taxes and transfers in Pakistan, with the focus on Islamic taxes and transfers?
  • How do these taxes and transfers related to state ‘fiscal’ taxes and transfers and to private informal transfers between families (such as remittances)? 
  • What is the comparative coverage and value of state, private and religious taxes and transfers and how these contribution to redistribution and inequality?

Using a secondary analysis of household survey data, our analysis follows the approach taken in the previous study of informal taxes and transfers in Rwanda, estimate the scale and redistributive effect of Zakat payments, alongside formal state taxes and transfers.


Published on: 20th January 2021

Skip to main content