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1 – 10 of 796Abdullah Campong Andam and Ahmad Zamri Osman
The purpose of this paper is to identify the factors influencing intention of Muslim Filipinos to give zakat on employment income.
Abstract
Purpose
The purpose of this paper is to identify the factors influencing intention of Muslim Filipinos to give zakat on employment income.
Design/methodology/approach
The study used the extended theory of planned behaviour – an extension of the theory of reasoned action – to investigate the factors influencing intention to give zakat. The theory introduces six variables (i.e. attitude, perceived behavioural control, injunctive norm, descriptive norm, moral norm and past behaviour) in predicting the intention to give zakat. Totally, 450 questionnaires were distributed to the respondents in a Muslim-majority area (i.e. Marawi City), and 384 cases were deemed usable. The data have been analysed using multiple regression analysis.
Findings
This paper finds that attitude, descriptive norm and moral norm have a positive relationship with the intention to give zakat. Meanwhile, perceived behavioural control, injunctive norm and past behaviour are found to have insignificant influence over intention. However overall, the study supports the extension of the theory of planned behaviour which accounts for 53 per cent of the variance in intention.
Originality/value
This paper provides new insights on factors influencing the intention to give zakat on a non-Muslim majority country setting where no zakat institution operates. This paper also used the extended theory of planned behaviour on zakat compliance literature.
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Qurroh Ayuniyyah, Ataul Huq Pramanik, Norma Md Saad and Muhammad Irwan Ariffin
This study aims to analyse the role of zakat in poverty alleviation and income inequality reduction based on the gender of zakat recipients.
Abstract
Purpose
This study aims to analyse the role of zakat in poverty alleviation and income inequality reduction based on the gender of zakat recipients.
Design/methodology/approach
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.
Findings
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.
Research limitations/implications
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.
Practical implications
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.
Originality/value
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.
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This paper aims to compare and contrast alternative pension plans in the market place and their status as zakatable wealth or property. These plans differ in terms of who is…
Abstract
Purpose
This paper aims to compare and contrast alternative pension plans in the market place and their status as zakatable wealth or property. These plans differ in terms of who is responsible for providing funds for pension benefit to the retirees upon retirement and who is responsible for bearing investment risk. Whether a pension plan is subject to zakat immediately or upon receipt at retirement depends on immediate accessibility to and ownership of the funds in the account. It makes no difference whether employer and/or the employee is (are) responsible for funding the plan and who bears the investment risk.
Design/methodology/approach
Descriptive and analytical methods were used.
Findings
There is consensus among Muslim jurists and shariah scholars that mandatory retirement plans offered as a part of compensation and benefit package for a job are subject to zakat when money is received upon retirement and non-mandatory plans offered as replacement for or supplement to employer-sponsored plans with voluntary employee participation are subject to zakat in each year of employment.
Originality/value
There is no prior research work in the extant literature examining zakatability of alternative retirement plans offered in the US marketplace. This paper fills this void and provides a comprehensive survey and analysis of all available retirement plans and their treatment with respect to zakat.
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Available zakat accounting standards as well as the laws governing business zakat suggest that the adjusted net working capital or the adjusted growth capital of a business may be…
Abstract
Purpose
Available zakat accounting standards as well as the laws governing business zakat suggest that the adjusted net working capital or the adjusted growth capital of a business may be regarded as the base for computation of its zakat liability. The apparent consensus follows from the fiqhi prescription of imposing zakat on urud al-tijarah or the inventory of goods available for trade. Some contemporary scholars however question the rationale underlying this method and argue that the objectives of the Shariah are better met by seeking recourse to alternative methods of zakat determination for business organizations. There is therefore a need to revisit the issues and subject them to fresh scrutiny in terms of economic rationality and consistency.
Design/methodology/approach
The paper examines the arguments of the “orthodox” school as well as those of some contemporary scholars on alternative methods of computing business zakat. It also undertakes a comprehensive review of the laws of zakat as they are related to businesses and the related accounting pronouncements along with their underlying rationale. As the issue of incentivizing zakat payment is an important one, and it is often linked to provision of tax benefits, the paper examines a few suggestions in this regard.
Findings
On examination of specific suggestions – specifically, of treating earnings as zakat base – to scrutiny in terms of economic rationality and consistency, the authors argue that the “orthodox” position is not only consistent but also makes enormous economic sense. Further, the issue of incentivizing zakat payment and that of lack of harmonization between business zakat accounting and taxation need not be and should not be resolved by making changes in the former because the same has a sound Shariah basis. It can be easily resolved, if need be, by making changes in methods of taxation (tax deduction or tax rebate) and base them on specific items in the balance sheet or the income statement.
Practical implications
The paper provides useful insights to policy makers who are concerned about the huge gap between actual and potential collection of zakat and are considering tax reforms for incentivizing business zakat mobilization. It highlights the diversity in practices relating to zakat computation and related taxation across Muslim countries.
Originality/value
The paper searches for and observes consistency and compatibility between the orthodox Shariah-legal position and several accounting and taxation-related policies relating to business zakat. The policy prescriptions are expected to rejuvenate and strengthen the global zakat sector.
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Abdullah- Al-Mamun, Ahasanul Haque and Muhammad Tahir Jan
The purpose of this study is to explore the variables that affect Muslim consumers’ perception towards tax rebate over zakat on income in Malaysia.
Abstract
Purpose
The purpose of this study is to explore the variables that affect Muslim consumers’ perception towards tax rebate over zakat on income in Malaysia.
Design/methodology/approach
A close-ended structured questionnaire was developed and a total number of 236 valid responses were collected through online survey from the Muslims residing in Malaysia.
Findings
This study found that halal-haram aspect of Islamic Shariah, legal consciousness and religiosity of Muslim consumers are positive significant factors for growing perceptions towards tax rebate over zakat on income in Malaysia.
Research limitations/implications
This study will definitely play an important leading role for the policy-makers and academicians in understanding the perceptions of Muslim consumers.
Practical implications
This study can assist zakat and tax authorities in Malaysia for taking corrective actions to adapt or improve the current policy on the basis of its Muslim consumers’ perception.
Social implications
The findings of this study can reduce the gap of understanding among Muslims in the society by letting other people’s perceptions towards tax rebate through zakat system in Malaysia.
Originality/value
As there are not enough studies in this area, this study will definitely play an important leading role for the countries or policy-makers or concerned zakat or tax institutions all over the world in capitalizing the practices which is highly and positively perceived by the Muslim consumers in Malaysia.
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Aziz Ur Rehman, Ejaz Aslam and Anam Iqbal
This study aims to apply the extended theory of planned behaviour (ETPB) to investigate the factors influencing the intention to give zakāt on employment income.
Abstract
Purpose
This study aims to apply the extended theory of planned behaviour (ETPB) to investigate the factors influencing the intention to give zakāt on employment income.
Design/methodology/approach
This study draws the required data through a survey in three main cities Makkah, Medina and Jeddah in Kingdom of Saudi Arabia (KSA). The final data sample is consisting of 650 useable questionnaires to analyse the objective of this study.
Findings
The study finds that moral norm, injunctive norm, descriptive norm and past behaviour have a significant influence on the intention to pay zakāt on employment income. The perceived behavioural control and attitude have a negative and weak impact on the intention to give zakāt on income.
Research limitations/implications
The findings of this study can be useful for the policymakers and regulators to enhance peoples' awareness to give zakāt to eradicate poverty and inequality in Muslim societies. zakāt is for the deprived people, so the consequences of this study might help to improve their liveability.
Originality/value
This study is unique because it identified the behavioural factors that affect the peoples' intention to give zakāt in KSA have yet to be profoundly explored in the literature. This study has gathered primary data and applied the ETPB to identify the factors influencing the zakāt compliance behaviour in KSA.
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Ram Al Jaffri Saad, Aidi Ahmi, Norfaiezah Sawandi and Norazita Marina Abdul Aziz
This study aims to identify the inputs from zakat administrators and experts needed for more efficient and effective zakat revenue generation.
Abstract
Purpose
This study aims to identify the inputs from zakat administrators and experts needed for more efficient and effective zakat revenue generation.
Design/methodology/approach
Face-to-face interviews with zakat executives, administrators and experts are conducted to collect data.
Findings
The findings show three components of input required in the zakat transformation: environment, resources and history. The environmental component comprises five sub-components: companies, banks, zakat recipients, individual zakat payers and the legislative, while the resource sub-components comprise tangible and intangible resources. For history, two components, namely, achievements and challenges, need to be taken into account by the zakat administration.
Research limitations/implications
This study’s main implication is that the components proposed in this study can serve as the basis for developing new strategies for improving zakat collection and distribution management to achieve a more efficient and effective level.
Practical implications
This study will be helpful for policymakers, especially zakat authorities, on how to enhance their administration.
Originality/value
The model developed in this study will help the zakat administration to reform and enhance zakat compliance and zakat revenue generation.
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Norazlina Abd. Wahab and Abdul Rahim Abdul Rahman
This paper aims to present a conceptual model on the efficiency and governance of zakat institutions that are responsible in collecting, managing and distributing zakat in…
Abstract
Purpose
This paper aims to present a conceptual model on the efficiency and governance of zakat institutions that are responsible in collecting, managing and distributing zakat in Malaysia. Zakat is an Islamic religious “tax” charged on the rich and well‐to‐do members of the community for distribution to the poor and the needy as well as other beneficiaries based on certain established criteria according to the Qur'an. The main aim of zakat is to protect the socio‐economic welfare of the poor and the needy.
Design/methodology/approach
The paper reviews and synthesises the relevant literature on efficiency, governance and zakat. The paper then developed and proposed a conceptual model to study the efficiency and governance of zakat institutions.
Findings
The paper identifies the appropriate methods to evaluate efficiency and governance of zakat institutions. Such evaluations are crucial for the Islamic financial system to function effectively in order to achieve the noble objectives of socio‐economic justice through proper distribution of wealth.
Originality/value
This paper presents a conceptual model of efficiency and governance of zakat institutions which would be useful for further empirical research in this area. The findings are not only relevant and applicable to Malaysia but also to other Muslim countries.
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Muhammad Akhyar Adnan and Nur Barizah Abu Bakar
The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by…
Abstract
Purpose
The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by relevant corporations. The aim is to determine their appropriateness and adherence to both the Islamic as well as the accounting theoretical perspectives.
Design/methodology/approach
Accounting standards and guidelines related to zakat, including the Financial Accounting Standard No. 9 and the Technical Release i‐1, are examined. Additionally, analyses are made on the practices of Islamic financial institutions to determine their compliance with both standards and ontological aspects of zakat.
Findings
The study reveals that there is a general misconception of zakat, as indicated in several standards and guidelines, which has consequently resulted in inappropriateness in their proposed corporate zakat recognition and measurement and hence presentations. These inaccuracies, in one way or another, have not been in line with the true spirit of zakat in Islam. More worryingly, some unfavorable consequences may and in fact have already been implicated on the larger Muslim community as a result.
Research limitations/implications
An alternative view on the accounting treatment of corporate zakat is offered in this paper with the aim to provide a fair and proper assessment of zakat on corporate wealth, which is more parallel to the true spirit of zakat.
Originality/value
The paper integrates both the revealed and the contemporary accounting knowledge in scrutinizing the standards and practices as well as in recommending an improved and meaningful alternative.
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Imron Mawardi, Tika Widiastuti, Muhammad Ubaidillah Al Mustofa and Fifi Hakimi
This study aims to investigate the effects of zakat and business assistance on the growth and well-being of mustahiqs (zakat recipients). This study also investigates the impact…
Abstract
Purpose
This study aims to investigate the effects of zakat and business assistance on the growth and well-being of mustahiqs (zakat recipients). This study also investigates the impact of macroeconomic variables on the welfare of mutahiqs.
Design/methodology/approach
The partial least squares-structural equation modelling method is used in this quantitative study, examining data from 137 mustahiqs. The data was collected from seven zakat institutions, which run effective zakat programmes to empower mustahiqs.
Findings
Zakat empowerment programmes and business assistantships positively impact the growth of mustahiqs’ businesses, beneficial to their well-being. Nevertheless, their well-being is unaffected by the proxy of the macroeconomy.
Originality/value
This study adds to the zakat literature by identifying the relationship between zakat, business growth, macroeconomic conditions and mustahiq welfare. Accordingly, this approach was made by combining primary and secondary data. This research offers a unique measure of welfare based on the concept of the Islamic objectives (Maqasid al-Shariah).
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