The Centralized Zakat Management System in Solving Zakat Management Issues in Malaysia: The Proposed Framework

The Centralized Zakat Management System in Solving Zakat Management Issues in Malaysia: The Proposed Framework

Rusni Hassan, Wan Amirah Naimah Wan Ismail, Zariah Abu Samah
Copyright: © 2021 |Pages: 19
DOI: 10.4018/978-1-7998-6811-8.ch007
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Abstract

Zakat is the third pillar of Islam and often associated as a tool to alleviate poverty. Proper execution, processes, and management of zakat from collection to distribution of zakat should result in the alleviation of poverty and improvement in quality of life for the less fortunate. However, in a Muslim majority country such as Malaysia, where not only is zakat collected regularly, with multiple zakat bodies taking on the role of managing zakat, the issue of poverty remains. This indicates a flaw within the existing zakat management system whereby there is either a lag between the funds collected and funds distributed, or the zakat management is inefficient. The chapter studies the current practices of zakat collection and disbursement in Malaysia while highlighting the relevant issues. Subsequently, developing a conceptual framework of a centralised zakat management through the enhancement of IT infrastructure. The main objective of the proposed framework is to improve the efficiency of the zakat collection and disbursement by establishing a consolidated database which will be accessible by all zakat authorities and creating strategic partnership with relevant authorities and organisations. These steps will promote the sharing of information, verification of information, and reduce the number of redundancy and conflicting information of zakat recipients. Ultimately, the end goal is to shorten the transaction time of funds from contributors to recipients through a systematic and orderly manner.
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Zakat As An Economic Tool To Alleviate Poverty

The term zakat is often related to purification and charity. A study by Abu Bakar & Abd.Ghani (2011) shows that zakat has been mentioned 32 times exclusively and 26 times when paired with salah or daily prayers. Clearly this shows the importance of zakat, as it is a tool that has the potential to help the society by reducing, if not eliminating poverty by placing an obligatory payment on the rich (Hudayati & Tohirin, 2010; Farah Aida Ahmad Nadzri et al. (2012); Ayuniyyah, Q (2018); Khairul Azhar Meerangani (2019); Razak, S.H.A. (2020). Zalloom (1988) states that while it is similar to tax and has a tax effect, but zakat is independent from other state affairs. The spending of zakat funds is restricted and limited to a small group of people, unlike tax funds where its spending is more flexible. Research by Ibrahim (2015) suggests that while the rich, or zakat contributors, make the zakat payments in hopes to purify their souls and assets, to show their sincerity of faith towards Allah S.W.T and to fulfil their obligations towards Allah S.W.T, zakat also has the ability to close the gap between the rich and the poor. The study continues to suggest that the distribution of wealth from the rich to the poor results in the reduction of poverty, discourages begging and promotes humility. Embong et al. (2013) and Mohd Doh (2014) also agrees that while zakat contributors are seeking purification and forgiveness by paying zakat, such actions may positively affect the stability of the economy. Therefore, it could also be thought of that the movement of money which is initiated by the need to fulfil one’s obligation towards Allah S.W.T, results in the rich contributing to the reduction of the nation’s level of poverty. Kidwai (2015) and Reza (2016) too suggests that the zakat does not only narrows the wealth disparity between the rich and the poor, but also helps in preserving the dignity of the poor. At the very least, the poor would be provided with the very bare minimum of their needs.

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