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This paper aims to investigate the zakat disclosure of Islamic banks at the global level. It is important for depositors and shareholders of Islamic banks to know whether the bank is paying zakat on their behalf or not. Additionally, disclosing the calculation method used is also necessary to eliminate uncertainties resulting from ambiguous reporting that can mislead the stakeholders. This issue becomes more obvious when considering that depositors and shareholders may have different accounts with different Islamic banks, which makes it quite confusing to have multiple ways of zakat calculation or different approaches on who is the party that pays it. This study analyzes the current practices across 13 countries and recommends best practices.

The objective of the paper objective is achieved through analyzing the annual reports of 34 Islamic banks in 13 countries for the years 2014 and 2019. It further quantifies the zakat disclosure by constructing a zakat disclosure index. This index considers the disclosure of four major constituents covering the amount and the responsibility for payment, the calculation method, the involvement of the Shariah board and the zakat duty on investment account holders. For further robustness, this study is further supported by content analysis measures using the zakat word count in annual reports.

The results indicate a major issue in zakat disclosure. The overall average of disclosure index is low. Most of the banks disclose limited information about zakat, such as the amount and the responsibility for payment, in their annual reports. Less than 40% of the examined banks disclose information about the role of the Shariah board in zakat calculation, and a very limited number of banks (9%) are found to disclose enough details about the zakat calculation method. Furthermore, none of the examined banks mentions the zakat due for the investment accounts. Overall, zakat disclosure of most of the banks, whether following Accounting and Auditing Organization for Islamic Financial Institutions or otherwise, are found to be not up to the expected best practices.

Among the limitations of this study is the sole dependence on annual reports of Islamic banks without considering other means that banks might be using to communicate zakat-related matters to stakeholders. Examples of such means include a website, social media and other direct or indirect marketing materials. Additionally, the results of this study shall not be overgeneralized regarding differences between countries because the sample does not include all Islamic banks in the selected country. Future research may use the proposed zakat disclosure index on a country-specific data sample.

The findings have significant implications as they raise a serious concern regarding the sufficiency of the Islamic banks’ disclosure about a core area of their responsibility, that is, the zakat. The index developed can be a tentative measure of zakat disclosure transparency pending further review. The result further suggests looking at the composition of members of Shariah boards to include at least one member with a sound accounting background. Zakat is a religious duty; therefore, a perceived lack of transparency on the amount, method of calculation and how the zakat is paid may affect the future injection of capital into Islamic banks.

An important contribution of this paper lies in the fact that the collected data is not provided in any available database. Rather, it is manually captured from the individual annual reports of reviewed Islamic banks. Further, this paper proposes an index to measure the zakat disclosure at bank and country levels.

This study aims to assess the feasibility of zakat distribution conducted by zakat community development program, one of the BAZNAS programs in Bringinsari village, Sukorejo subdistrict, Kendal Regency, Central Java using the zakat village index (IDZ).

IDZ has five components in measuring the effectiveness of charity for the welfare of the community is the economic dimension, the dimension of education, dimension of health, social dimension of humanity and dimensions of da’wah. The economic dimension consists of four variables, namely, the presence of productive economic activities, trade centers and access to transportation and logistics services and the presence of access to financial institutions.

Based on IDZ measurement in Bringinsari village, it is found that IDZ of this village is 0.47. It showed that the condition of the village is good enough. As the result of this calculation, Bringinsari village is under consideration to receive zakat funding.

This research will be done in Bringinsari village Sukorejo district, Kendal regency from April 1, 2018 until July 2, 2018.

Based on the result of IDZ result done in Bringinsari Sukorejo district, Kendal regency, it is gained index calculation result for about 0.47. Therefore, the conclusion is drawn that the village deserves to get zakat funding. Economic dimension is still low, 0.32. Therefore, in this case, a motivation to help villagers is needed. The exact program in improving the people in Bringinsari based on priority is economic, health, education program in accordance with IDZ calculation.

The welfare measurement of zakat receiver or mustahiq adopts welfare index (CIBEST). CIBEST model combines material and spiritual fulfillment of human needs quadrants. This index is split into four categories, namely, welfare, material poverty, spiritual poverty and absolute poverty (Puskas BAZNAS, 2016).

Based on measurement result that has been obtained, the authors can recommend some program activities to help improving their welfare. There are three dimensions, which IDZ prioritized or considered to be assisted, such as economic dimension, activity program for housewives. If Bringinsari has got an indicator as a good village and the impact is good as well, therefore, it can try to move zakat fund distribution to other villages.

This study aims to analyse the role of zakat in poverty alleviation and income inequality reduction based on the gender of zakat recipients.

This study used the Centre of Islamic Economic and Business Studies (CIBEST) model as a poverty measure and the Gini coefficient and Atkinson index as income inequality measures to analyse 1,300 zakat recipients in five different areas of West Java, Indonesia.

Based on the CIBEST model, zakat distribution programmes have better salutary effects on male-headed households in terms of material (0.215) and absolute (0.037) poverty indices, whereas female-headed households have better performance on the falah (0.438) and spiritual (0.022) poverty indices, with greater changes in these indices in female-headed households. According to the Gini coefficient and Atkinson index, female-headed households have better income distribution one-year after zakat distribution programmes, whereas the male-headed households have better performance in regards to welfare loss.

The present study only used the poverty line standard published by the Central Board of Statistics from the Republic of Indonesia to identify respondents who live under the poverty line.

This paper can serve as a reference for zakat institutions in the implementation of zakat distribution programmes when the gender of zakat recipients is taken into consideration.

Not many studies have analysed the impact of gender in zakat distribution programmes despite gender being one of the most important determinants of poverty and income inequality. This study attempts to determine the economic impact of zakat from the perspective of gender.

The paper aims to contribute to the discussion on Shari'ah governance systems by examining the extent of disclosure on the Shari'ah Supervisory Board (SSB) as well as the content of the Board's report in the annual reports of 23 Islamic banks in Malaysia and Indonesia. The paper also investigates the disclosures about zakat (Islamic levy).

The study is a cross-sectional analysis of annual report disclosures in the year 2009. The paper uses both disclosure indices and content analysis to measure the extent of disclosures about SSB and zakat. The paper also tests hypotheses examining the relationship between SSB characteristics and the extent of the SSB-related and zakat disclosures.

The results indicate that SSB-related and zakat disclosures are still limited, with only four banks disclosing more than half of the SSB Index. What is noticeable is the low level of disclosure on sensitive matters. Among the factors associated with SSB-related disclosures are cross-membership with other SSBs and the expertise of SSB members in accounting, banking, economics or finance

Originality/value

The study is the first to provide an in-depth analysis of Shari'ah disclosures in Malaysian and Indonesian Islamic banks. As such, this study makes an important contribution to the debate on Shari'ah governance systems and has implications for regulators and standard setters. The Malaysian and Indonesian standard setters could play an important role in ascertaining appropriate disclosure requirements relating to the SSB as the study suggests that the level of disclosure is less than expected. The evidence also suggests the need for mandatory enforcement of standards on these types of disclosures.

This study investigated the receptivity of the zakat wakalah system in social finance in Malaysia under the lens of innovation diffusion theory (IDT).

This study conducted quantitative research using Google Forms. The sample size was 261 respondents who participated and were useable in this study. The Statistical Package of Social Science (SPSS) 27 was employed to analyse the data. The data were collected online from August 1 till August 31, 2022.

The results reported significant effects of relative advantage, simplicity, compatibility and perceived benevolence on the zakat wakalah receptiveness index (ZAWi) for Medium Group Acceptance (MEGA) and High Group Acceptance (HIGA). As for Low Group Acceptance (LOGA), insignificant results were reported in relative advantage, compatibility and perceived benevolence but not simplicity.

This study was limited to Labuan geographically, Malaysia and the variables employed. Yet, the results highlight the factors that influenced ZAWi and the two groups namely HIGA and MEGA found them all significant.

This study enhanced the theoretical and practical effects of ZAWi. The results rendered a competitive benchmark for zakat institutions and zakat payers for improved zakat distribution policy.

This study advanced psychology and management theory by improving knowledge of zakat wakalah for effective zakat distribution. In turn, it can be employed as the baseline theory for future studies to enhance existing hypotheses.

This study introduced a new ZAWi formulated from IDT in the context of zakat distribution in Malaysia.

Zakat has succeeded in becoming one of the safety nets for welfare during the crisis. As a result, continuous improvement is a necessity, especially through strengthening technology adaptation. This study aims to explore the factors determining Muslim behavior on their intention to pay zakat by taking into consideration the adoption of digital technology using the modified Unified Theory of Acceptance and Use of Technology (UTAUT).

The data collected were 265 respondents who live in urban and suburban areas. They were processed using the partial least square structural equation modeling (PLS-SEM) design. Furthermore, the multigroup analysis (MGA) was conducted to capture the difference results between urban and suburban.

The findings show that performance expectancy, social influence, facilitating conditions, perceived security and privacy and zakat literacy significantly increase the intention of Muzakki to adopt financial technology. Perceived security and privacy has succeeded in being an important predictor of digital payment adoption for Muzakki. This paper provides a specific description of the adoption of Muzakki living in urban and suburban areas by using MGA. The research findings illustrate that there is a different urgency between the related variables. Suburban communities have more significant results regarding the research model used.

This research provides new component variables that can drive individuals’ intentions to use digital services to pay zakat online by using the redesigned UTAUT model. Further research can explore more variables related to zakat digitalization, such as social media interaction, by conducting in-depth interviews with stakeholders to improve zakat performance in this digital era.

The result of this research recommends that zakat institutions enhance their zakat literacy and education among the Muslim population to improve zakat performance. The government should pay attention to the digital ecosystem to attract the community to use a digital platform.

This research modified the UTAUT model by integrating several other important constructs to produce more comprehensive findings in investigating the factors that can influence an individual's intention to pay zakat through an online digital platform. This study also examined the indirect effect to obtain significant results by positioning perceived security and privacy as an intervening variable. The implementation of the MGA was conducted to divide research respondents into two categories (urban and suburban) and compare the test results.

Digital technology has been widely applied in zakat collection. Millennials, who are now dominating the productive phase and at their peak carrier path, are the potential target for zakat collection as their number reached 31.3% of the Indonesian population. On the other hand, public and private zakat institutions have attempted to optimize the country’s zakat potential, reaching 233.6tn rupiahs, through development of a digital platform for zakat collection. However, the gap between the actual collection of zakat with its potential is still large. This study aims to analyse the factors affecting millennials in paying zakat through direct payment or through digital platform of private or public zakat institutions.

Multinomial logistic regression method, which signifies the contribution of this study, is used to analyse factors influencing millennials in their zakat payment. In addition, cross-tabulation is used to classify the characteristics of respondents. Respondents are selected conveniently through a digital questionnaire distributed in February–March 2021. Respondents are also selected purposively based on their experience in paying zakat through direct, private or public zakat institutions, which are consisted of 50 respondents per each category; thus, the total becomes 150 respondents.

Based on the results, three variables, namely, education, accessibility and age, are found to have a significant influence on zakat payment through online platforms provided by private zakat institutions. Meanwhile, variables that influence zakat payment through online platforms provided by public zakat institutions are education, accessibility and income. This study also finds that millennials have the highest probability to select online platforms provided by private zakat institutions as a channel of their zakat payment. However, the overall result shows that millennials tend to pay directly to the mustahik (zakat recipients) rather than via online platforms, presumably because of their limited zakat literacy.

The purposive sampling technique used to determine the research samples limits the generalization of the study.

This paper establishes a new approach in analysing millennials preference in their zakat payment with digital inclusiveness. The use of a multinomial logistic approach, which has not been widely applied in such research, strengthens the analysis that is relevant to the need of both private and public zakat institutions to analyse determinants of millennials in paying their zakat through online platform. This study can be used as a reference to formulate a more effective marketing strategy for zakat collection. This paper also serves as an estimate of the preference with some selected typical characteristics of millennials by using a multinomial logistic approach.

Formal payment through the zakat institution theoretically is more preferable than direct payment to mustahik (zakat recipients) in the zakat campaign. However, based on this research, despite digital marketing and platforms having been well-used by both private and public zakat institutions, the millennials still prefer direct zakat payment than through online platforms. The findings of this research suggest the importance of strengthening zakat literacy through a more effective digital marketing strategy of zakat institutions which target the millennials.

This study fills the gap in the literature on how millennials choose their zakat payment method, whether through digital platforms developed by private and public zakat institutions or directly to the targeted zakat recipients. The use of multinomial logistic regression approach adds the novelty of this research.

This study aims to examine how digitalization affects the work efficiency of the Shariah Supervisory Board (SSB) in Islamic banks.

This study uses panel data analysis of annual report disclosures over the past 10 years. The authors have selected 79 Islamic banks for the period ranging from 2012 to 2021. The criteria for SSB efficiency used in this research are disclosure of Zakat and disclosure in the SSB report.

The econometric results show that digitalization has a positive effect on improving the work efficiency of the SSB in Islamic banks. Accordingly, the authors provide evidence that the higher the bank's digital engagement, the higher the quality of the SSB.

The findings highlight the need to improve the current understanding of SSB structures and governance mechanisms that can better assist Islamic banks in engaging in effective compliance with recent governance and accounting reforms. Moreover, Islamic banks are the most capable and appropriate to implement and activate digitalization because they are based on a vital root calling for development if there are executives believing in it, as well as legislation supporting and serving them.

This study aims to examine the impact of zakat on the economic growth for a sample of Muslim countries. As a matter of fact, Zakat is a religious tax on wealth paid annually to specified recipients. As it leads to income redistribution and increases the aggregate demand, zakat can be a growth factor in the Islamic framework.

This paper is based on a dynamic panel data model for the purpose of investigating the role of zakat in the economic growth for a sample of eight Muslim countries during the period ranging from 2004 to 2017. The general method of moments is applied.

The findings provide evidence that zakat stimulates the country’s growth. Indeed, as zakat funds are directed to increase consumption, investment or government expenditure, they spur on the economic growth. Moreover, the authors come to the conclusion that more trade openness allows an increase in the real gross domestic product (GDP) per capita. However, the broad money to GDP and population growth rate seem insignificantly associated with the economic growth for the sample considered.

The findings have substantial implications for the economic policy in Muslim countries. Authorities may further rely on zakat to boost the economic growth. First, it is essential to improve the muzakki’s knowledge on zakat to increase their intention, and so their ability and willingness to pay zakat. Second, the government intervention in both zakat collect and distribution becomes mandatory. Therefore, the contribution of zakat to the economic growth will be higher. This requires better-quality services of zakat institutions.

A few studies have empirically looked into the impact of zakat on the economic growth, especially for panel data. Hence, the present study tries to enrich the literature on this topic. It creates significant evidence regarding the relevance of zakat in Muslim countries. The findings provide empirical support that zakat is an additional growth factor in the Islamic framework.

The purpose of this paper is to examine the role of zakat (the Islamic tax) in alleviating poverty and inequality in Pakistan using a newly developed index, namely, the Basic Needs Deficiency Index (BNDI).

The study formulates an index (BNDI) to measure the deficiency and effectiveness of zakat as one of the different items of government expenditure/spending to alleviate poverty. In this paper, Pakistan is chosen as a case study for two reasons: the availability and accessibility of data required for computing BNDI; and, in the past, no index such as this had been used to measure poverty in Pakistan.

The results obtained from the computation of the BNDI have been able to explain the effectiveness of zakat in alleviating poverty and inequality in Pakistan.

The findings of the study can be used by policymakers to measure and improve the effectiveness of zakat in reducing poverty and inequality.

As the ultimate beneficiaries of zakat are the poor people, the outcome of this study may help improve their quality of life.

The paper develops a new methodology to measure poverty alleviation in Pakistan, focusing on the poor households’ consumption/expenditure on basic needs, government spending in terms of zakat and the number of zakat recipients as the three main determinants. The index developed in the present study can be applied to measure the performance of all Muslim countries whose provision of zakat is embedded in the national agenda to alleviate poverty.