Innovations of Zakat (Alms) Distribution Practices in Malaysia

Innovations of Zakat (Alms) Distribution Practices in Malaysia

Rosnia Masruki
DOI: 10.4018/978-1-7998-1245-6.ch013
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Zakat (alms) is one of the Islamic social finance tools, besides waqaf (endowment) that can contribute to the socio-economic development of the Muslims, and society at large (ummah). In Malaysia, the local media have reported complaints from some dissatisfied members of the public on the distribution of zakat to zakat beneficiaries (asnaf). These emerge despite the introduction of numerous innovations by zakat institutions under the administrations of Majlis Agama Islam Negeri (MAIN) or State Islamic Religious Councils (SIRC), in the form of assistance schemes, for the distribution of asnaf in Malaysia. This chapter discusses the concept of innovations in zakat distribution according to three foundations: fatwa muzakarah (Islamic ruling discussion) resolutions, ijtihad (independent interpretation and reasoning by scholars) in handling issues related to zakat distribution, and temporal dynamism of the Shariah. Numerous challenges concerning zakat issues have also highlighted the significant roles of zakat institutions, especially in the eradication of poverty.
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Zakat (tithe or commonly termed as alms) is often considered as the primary mechanism to improve the socio-economic well-being of the Islamic ummah; in fact, it forms one part of the Islamic social financial system. The obligation to pay zakat, as the third pillar of Islam, accentuates the urgency of its collection and distribution. It is a similar concept of tithing in the West but in Islam it is well known as alms. In Islamic jurisprudence, the term zakat means giving a portion of one’s private wealth or assets to the rightful recipients as commanded by God. It is a religious duty as part of the worship imposed on Muslim individuals as one of the five basic tenets in Islam1 as a means of cleansing and purifying themselves.

There are five requirements of zakat obligation which are as follows: i) Islam - zakat payment is compulsory for Muslims; ii) Independence - nowadays there are no slaves but the requirement of being independent is one of the conditions to be liable for zakat payment; iii) Absolute possessions - the property must be fully owned at present; iv) nisab (minimum value) – the minimum amount upon which zakat is payable and to identify whether zakat assessment comes into effect. Nisab in Malaysia is calculated based on the value of gold equivalent to 85 gram depending upon its market value; v) Haul (duration) - the property must have been possessed for a complete year. All Muslims are obliged to pay their dues in zakat, if they have fulfilled all the five conditions mentioned above.

In Malaysia, as is the case in other Muslim countries in Asia and the Middle East, issues relating to distribution have become the main focus of discussions on zakat, seeing that the stream of zakat contributions is constant, amounting to large sums of money. For example, in Malaysia, the total zakat collection in 2009 was RM1.2 million (Zakat Collection Centre, Federal Territory). Even so, past studies suggest that zakat distribution is a far larger concern (Mohd Rilizam et al., 2018) relative to zakat collection.

Wahab & Rahman (2011) found that the public are dissatisfied with the zakat centers as the distribution does not cover all eight recipients (asnaf), despite the ever-increasing collected total. The public argue that although zakat collection has amounted to millions of funds, the number of poor and homeless people are still high, especially in large cities such as Kuala Lumpur (city center of Malaysia). This chapter therefore, intends to elaborate on the numerous innovations in zakat distribution, that is, zakat schemes and numerous programs that have been implemented by zakat centers, which are under the administration of State Islamic Religious Council (SIRC) in the respective region.


Innovations In Zakat Distribution

In general, zakat must be paid to the Zakat institutions of each state, and these agencies will then be responsible for the distribution of the collected zakat. The Quran (9:60) has outlined the main principle of zakat distribution: “The alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarer; a duty imposed by Allah. Allah is Knower, Wise.” The Quran makes clear mention of these eight recipient groups so as to prevent transgressions in the distribution of alms. However, in certain situations, the definitions for each group requires further interpretation, which must reconcile with the guidelines of Shariah, on the part of zakat institutions. The institution plays a crucial role in enhancing its accountability in managing the wealth of the Muslims (Masruki et al., 2018), such as zakat and waqf, especially in bridging the gap between the rich and the poor. Still, there remain some issues concerning the management and distribution of zakat (Mohd Rilizam et al., 2018; Rahman et al., 2012; Yusoff et al., 2012; Kaslam, 2011; Bakar & Rashid, 2010; Wahid & Kader (2010); Wahid et al., 2009; Guermat et al., 2003).

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