research on zakat

ZAKAT AND POVERTY ALLEVIATION IN INDONESIA: A PANEL ANALYSIS AT PROVINCIAL LEVEL

• Evi Aninatin Ni'matul Choiriyah Airlangga University, Indonesia
• Abdul Kafi Airlangga University, Indonesia
• Irma Faikhotul Hikmah Airlangga University, Indonesia
• Imam Wahyudi Indrawan International Islamic University Malaysia, Malaysia

As a pillar of Islam and an instrument for poverty alleviation, zakat is perceived as an effective tool for tackling the problem of poverty in the Muslim world. However, whether zakat is effective in improving indicators of both quantity and quality of poverty is still a question requiring empirical investigation. This study is aims to empirically investigate the role of impactful zakat in poverty alleviation as indicated by the BAZNAS prosperity index (Indeks Kesejahteraan BAZNAS or IKB), at provincial level in Indonesia. This study covers annual data from 28 provinces in Indonesia for the years 2017 and 2018. Data analysis uses a panel-data approach, with three indicators of poverty – the poverty headcount ratio (P0), poverty gap index (P1), and poverty severity index (P2) – as dependent variables. The study finds that higher BAZNAS IKB, used as a sign of impactful zakat, significantly reduces P0 but has insignificant effect on P1 and P2. The results of this study imply that zakat managers should put emphasis on the poorest section of the poor population to enable improvements in poverty indicators through zakat utilization.

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On Zakat by Dr. Yusuf Nur

Posted on April 7, 2024 by IU Muslim Voices

In Islam Zakat can be conceptualized as redistribution of wealth which is integral to Islamic equity and justice. It is an obligatory charity and one of the five pillars of the religion, with the other four pillars being the declaration of faith, the daily prayers, fasting during the month of Ramadan, and pilgrimage to Mecca. The last pillar is only required once in one’s lifetime only if they can afford it and are healthy enough to undertake the journey.

As an act of almsgiving practiced once a year, Muslims often choose Ramadan or the beginning of the Islamic New Year to give zakat. There are two types: Zakat-ul-maal a form of tax imposed by God on the wealthy for the benefit of the poor and needy, and Zakat-ul-fitr, paid to the poor and needy before the end of Ramadan. Neither type of zakat can be likened to tithing since neither is paid to the mosque. The mosque may collect zakat but may not use it for mosque related expenses. Any zakat collected by the mosque must be distributed to those who meet the necessary eligibility requirements. There is no other form of tax ordained in Islam.

There are various verses in the Quran that lays down the main objectives of zakat in Islam. For example, in Surah Al-Hashr, Verse 7:

كَي لا يَكونَ دولَةً بَينَ الأَغنِياءِ مِنكُم…

… So that it (wealth) may not be [a benefit] going round and round among such of you as may [already] be rich.

Zakat is to be paid by the head of the family, unless they themselves are poor or needy in which case they’d qualify to receive zakat. The eligibility requirements for potential recipients of either zakat is the same and are specified in Surah Al-Tawba, Verse 60. This verse lists eight types of qualifications each of which may make a person eligible to receive Zakat:

إِنَّمَا الصَّدَقاتُ لِلفُقَراءِ وَالمَساكينِ وَالعامِلينَ عَلَيها وَالمُؤَلَّفَةِ قُلوبُهُم وَفِي الرِّقابِ وَالغارِمينَ وَفي سَبيلِ اللَّهِ وَابنِ السَّبيلِ فَريضَةً مِنَ اللَّهِ وَاللَّهُ عَليمٌ حَكيمٌ

The offerings given for the sake of God are [meant] only for the poor and the needy, and those who are in charge thereof, and those whose hearts are to be won over, and for the freeing of human beings from bondage, and [for] those who are overburdened with debts, and in God’s cause, and [for] the wayfarer: [this is] an ordinance from God – and God is all-knowing, wise.

The amount of Zakat to give every year is also regulated in Islam. For instance, Zakat-ul-maal is mandatory on a yearly basis on any wealth whose value is above a certain minimum amount. In today’s money the minimum amount one needs to have to qualify to pay zakat is around $2000. The zakat rate for Liquid assets that are more than $2000 is 2.5%. If a Muslim has owned, for example, $5000 for a year, they are obligated to pay on it: ($5000-$2000) x 2.5% = $75. Traditionally the amount of zakat-ul-fitr due was set by the Prophet at about two dry quarts of staple foodstuffs such as wheat or dates. When expressed in today’s dollars, the amount due this year in the U.S. is $12 per person in the family. Other types of assets (for example livestock) have their own rates and can be paid in kind.

In the U.S., mosques often facilitate the collection and distribution of zakat-ul-fitr and zakat-u-maal. Most American Muslims pay their zakat at their local mosque. Others send their zakat to charity organizations that collect and distribute zakat to those in need in the U.S. and across the world.

_____________________________________________________________________

Dr. Yusuf Nur is an Associate Professor of strategic management and international business at Indiana University Kokomo.

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International Conference on Entrepreneurship, Business and Technology

InCEBT 2022: Industry Forward and Technology Transformation in Business and Entrepreneurship pp 103–112 Cite as

Islamic Banks and Their Zakat Distribution Practices

• Nurul Iffah M. A. Zaaba   ORCID: orcid.org/0000-0002-9899-4255 2 &
• Rusni Hassan   ORCID: orcid.org/0000-0002-3041-2837 2  
• Conference paper
• First Online: 01 August 2023

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Islamic banks in Malaysia have been actively paying, reporting, and distributing their own zakat , albeit a few are not doing so. These three types of information can be found in the banks’ published documents, which are the financial statements. However, the disclosure of information on zakat distribution is limited. Thus, this study’s objective is to determine how Islamic banks that pay zakat in Malaysia distribute their zakat . This study was conducted using semi-structured interviews where bank officers in charge of zakat funds were interviewed to gather their insights regarding how banks distribute zakat . The data collected were analysed using computer-assisted qualitative analysis software (CAQDAS) named ATLAS.ti. Then, codified data was generated in table form using the Thematic Analysis Matrix (TAM). This study found that insufficient information was disclosed in the financial statements and annual reports of Islamic banks, particularly on zakat distribution practices. Hence, this study suggests that the information in Islamic banks’ financial statements be further enriched with more extensive zakat disclosures.

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Zaaba, N.I.M.A., Hassan, R. (2023). Islamic Banks and Their Zakat Distribution Practices. In: Yusoff, M.N.H. (eds) Industry Forward and Technology Transformation in Business and Entrepreneurship. InCEBT 2022. Springer, Singapore. https://doi.org/10.1007/978-981-99-2337-3_10

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Watch CBS News

What is Eid al-Fitr? 6 questions about the holiday and how Muslims celebrate it, answered

By Ken Chitwood

Updated on: April 9, 2024 / 8:03 AM EDT / The Conversation

Ken Chitwood  is a senior research fellow, Muslim Philanthropy Initiative at Indiana University–Purdue University Indianapolis and journalist-fellow at the Dornsife Center for Religion and Civic Culture at the  University of Southern California Dornsife College of Letters, Arts and Sciences .

Eid al-Fitr, one of Islam's principal festivals, will be celebrated April 9, 2024, according to the Fiqh Council of North America . At the middle of June, Muslims will celebrate Eid al-Adha. Ken Chitwood, a scholar of global Islam, explains the two Islamic festivals.

1. What is Eid?

Eid literally means a "festival" or "feast" in Arabic. There are two major eids in the Islamic calendar per year – Eid al-Fitr earlier in the year and Eid al-Adha later.

Eid al-Fitr is a three-day-long festival and is known as the "Lesser" or "Smaller Eid" when compared to Eid al-Adha, which is four days long and is known as the "Greater Eid."

2. Why is Eid celebrated twice a year?

The two Eids recognize, celebrate and recall two distinct events that are significant to the story of Islam.

Eid al-Fitr means "the feast of breaking the fast." The fast, in this instance, is Ramadan , which recalls the revealing of the Quran to Prophet Muhammad and requires Muslims to fast from sunrise to sundown for a month.

3. How do Muslims celebrate Eid al-Fitr?

Eid al-Fitr features two to three days of celebrations that include special morning prayers. People greet each other with "Eid Mubarak," meaning "Blessed Eid" and with formal embraces. Sweet dishes are prepared at home and gifts are given to children and to those in need. In addition, Muslims are encouraged to forgive and seek forgiveness. Practices vary from country to country.

In many countries with large Muslim populations, Eid al-Fitr is a national holiday. Schools, offices and businesses are closed so family, friends and neighbors can enjoy the celebrations together. In the U.S. and the U.K., Muslims may request to have the day off from school or work to travel or celebrate with family and friends.

In countries like Egypt and Pakistan, Muslims decorate their homes with lanterns, twinkling lights or flowers. Special food is prepared and friends and family are invited over to celebrate.

In places like Jordan, with its Muslim majority population, the days before Eid al-Fitr can see a rush at local malls and special "Ramadan markets" as people prepare to exchange gifts on Eid al-Fitr.

In Turkey and in places that were once part of the Ottoman-Turkish empire such as Bosnia and Herzegovina, Albania, Azerbaijan and the Caucasus, it is also known as the, "Lesser Bayram" or "festival" in Turkish.

4. How do Muslims celebrate Eid al-Adha?

The other festival, Eid al-Adha, is the "feast of the sacrifice." It comes at the end of the Hajj , an annual pilgrimage by millions of Muslims to the holy city of Mecca in Saudi Arabia that is obligatory once in a lifetime, but only for those with means.

Eid al-Adha recalls the story of how God commanded Ibrahim to sacrifice his son Ismail as a test of faith. The story, as narrated in the Quran, describes Satan's attempt to tempt Ibrahim so he would disobey God's command. Ibrahim, however, remains unmoved and informs Ismail, who is willing to be sacrificed.

But, just as Ibrahim attempts to kill his son, God intervenes and a ram is sacrificed in place of Ismail. During Eid al-Adha, Muslims slaughter an animal to remember Ibrahim's sacrifice and remind themselves of the need to submit to the will of God.

5. When are they celebrated?

Eid al-Fitr is celebrated on the first day of the 10th month in the Islamic calendar.

Eid al-Adha is celebrated on the 10th day of the final month in the Islamic calendar.

The Islamic calendar is a lunar calendar, and dates are calculated based on lunar phases. Since the Islamic calendar year is shorter than the solar Gregorian calendar year by 10 to 12 days, the dates for Ramadan and Eid on the Gregorian calendar can vary year by year.

6. What is the spiritual meaning of Eid al-Fitr?

Eid al-Fitr, as it follows the fasting of Ramadan, is also seen as a spiritual celebration of Allah's provision of strength and endurance.

Amid the reflection and rejoicing, Eid al-Fitr is a time for charity, known as Zakat al-Fitr. Eid is meant to be a time of joy and blessing for the entire Muslim community and a time for distributing one's wealth.

Charity to the poor is a highly emphasized value in Islam. The Quran says ,

"Believe in Allah and his messenger, and give charity out of the (substance) that Allah has made you heirs of. For those of you who believe and give charity – for them is a great reward."

This piece incorporates materials from an article first published on Aug. 28, 2017. The dates have been updated. This article is republished from The Conversation under a Creative Commons license.

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Dedicate your Zakat to Gaza

Your Zakat is a lifeline for women in Gaza

As the situation continues to deteriorate in Gaza, some 1.7 million people are displaced and facing a dire situation. And now starvation is bearing down on Palestinians in Gaza. Women are among the most impacted, including around 155,000 pregnant women and new mothers struggling to survive. They are suffering from hunger and the diseases that stalk it, amid life-threatening shortages of food, water and medical care. This Ramadan, UNFPA launches a Zakat campaign to support the most vulnerable in Gaza with life-saving and essential services. Zakat giving will support women and their families with cash assistance to improve access to their urgent needs. Cash assistance is one of the few viable interventions to support the affected population in Gaza, as the humanitarian and commercial crossing into Gaza have been either closed or severely limited. Zakat giving will also help provide women with Dignity Kits, which are menstrual health hygiene kits to help maintain their dignity and hygiene and safeguard their menstrual health. Your Zakat during these holy days is a lifeline for women and their families in Gaza.

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Please note you do not have access to teaching notes, zakat management: the crisis of confidence in zakat agencies and the legality of giving zakat directly to the poor.

Journal of Islamic Accounting and Business Research

ISSN : 1759-0817

Article publication date: 20 January 2020

Issue publication date: 20 January 2020

The purpose of this study is to look at Zakat management and the crisis of confidence in the ability of the state and zakat agencies to dispense zakat to the rightful beneficiaries as mentioned in the Quran. Confidence is a very important element between the payers and collectors of zakat and when this is lost, it affects the willingness of the payers to give zakat to the zakat collectors (state or zakat agency). This crisis of confidence led to the need to look at the legality of the payer giving zakat directly to the beneficiaries and whether this is a sin as argued in certain quarters.

Design/methodology/approach

Using the qualitative method by using historical, analytical and critical tools, the research examines the concept of proximity in the distribution of zakat and based on this argues that giving zakat directly to the beneficiaries is a viable option when there is a crisis of confidence between the payer and the state or zakat agency.

Through the analysis of the opinions of scholars, the research affirms that scholars are divided on whether to pay zakat to the state or give it directly to the beneficiaries. Based on this, the research concludes that although the ideal is to give zakat to the state or zakat agency, but there is no sin in giving zakat directly to the beneficiaries especially where there is a problem of confidence in the state and/or zakat agency.

Research limitations/implications

The research discussed the legality of giving zakat to the recipients of zakat directly using the historical, analytical and critical tools. This shows that the research is qualitative in nature and is library based therefore limited in scope. Basically, this research is concerned with refuting the claim that it is a sin for zakat payers to give zakat directly to the recipients especially when there is a problem of trust in zakat agencies and a crisis of confidence in the ability of these agencies to do what is right with the zakat funds. This leaves room for further research on the issue.

Practical implications

It is important to create confidence in zakat agencies' collection and distribution of zakat so that it will encourage more Muslims to pay their zakat and allow it to reach as many people as possible. Encouraging the creation of a vetting organization by Muslim professional accountants and others that can help in making zakat agencies transparent and trustworthy.

Social implications

It emphasizes the importance of trust and confidence that institutions must project for the people to do business with them.

Originality/value

The research contributes to the body of knowledge on zakat collection and distribution. It shows the importance of trust and confidence in zakat management and recommended ways in which trust and confidence could be built in the effective collection and distribution of zakat.

• Rating organization
• Zakat agency
• Zakat management

Owoyemi, M.Y. (2020), "Zakat management: The crisis of confidence in zakat agencies and the legality of giving zakat directly to the poor", Journal of Islamic Accounting and Business Research , Vol. 11 No. 2, pp. 498-510. https://doi.org/10.1108/JIABR-07-2017-0097

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