Zakat is the third pillar in the five basic tenets of Islam. It is where worship converges with socio-economic affairs of society in the Islamic paradigm. An Islamic obligation, the Prophet Muhammad implemented Zakat in a broad framework, which included the fiscal support of the poor and needy, enabling them to enhance their livelihoods and thereby eradicating poverty. As modern Muslim states, such as Pakistan, are increasingly relating issues of their heritage and faith to questions of self-identification and development, this study explores the concept of Zakat and discerns the role of the state in the early Islamic period in the pursuit of grasping the essence of the context in which the institution was originally established, to thereby conduct an appraisal of the system of Zakat in Pakistan. The identity of Pakistan comes into sharp focus, as the normativeness of Zakat requires an understanding as to the relevance of the Islamic faith to public policies of country.