“Enhancing Efficiency in Tax Administration”
ESTABLISIHNG AN EFFECTIVE AND EFFICIENT ZAKAT INSTITUTION: A MALAYSIAN EXPERIENCE IN THE FEDERAL TERRITORIES Hj. Mohd Rais Hj. Alias Chief Executive Officer Zakat Collection Centre Federal Territories Religious Council Abstract Zakat is one of the pillars of Islam. It is not an act of worship and ranks in importance immediately after the prescribed solah. Zakat or alms tax can be defined as that portion of a man’s wealth which is designated for the eight asnafs. The term is derived from the Arabic verbal roots meaning “to increase” “to purify” and ”to bless”. Further, zakat enhances the feeling of responsibility towards the wealthy and riches bestowed by Allah upon oneself. The discharge of such duty under this third pillar of Islam therefore not only cleanses the wealth or assets of the giver as it is mandatory for Muslims to part a certain portion, but zakat also in a way, teachs and moulds the personality and traits of Muslims to be charitable and sensitive towards the plights of others who are less fortunate. In Surah Al-Baqarah: 110 Allah said, “ And be steadfast in your prayers and pay the zakat. Whatever good you send ahead for your own selves you shall find rewards with Allah. Truly Allah sees well all that you do.” The nature of zakat is to pay a certain amount of wealth from a certain kinds of wealth to specific recipients when the wealth reaches the designated minimal amount of wealth (nisab) for a full cycle of a lunar year (haul). In general when zakat is due, it is an obligation to a Muslim to pay zakat on time to satisfy his religious duty as Islam always encourages any immediate action in doing good things. Allah says in the Quran in Surah Ali Imran (3), verse 133, “And hasten to forgiveness from your Lord and a garden as wide as heavens and earth, prepared for the righteous”. In line with the verse, Yusuf al-Qaradawi asserts that, the immediacy of zakat payment is highly commended. According to the majority of Muslim scholars, the details of zakat were first stipulated in the second year of hijrah. It was during the month of Ramadhan that zakat fitr was imposed and in the month of Syawal of the same year on zakat mal or assets. Conversely, the institution of zakat decreases the tendency of the recipient to be bitter or angry towards the fortunate groups in the society. It also inculcate the realisation 1
that other sectors of the community care for their (the recipient) well-being. Therefore, this realisation will be the catalyst of a brotherhood in Islam. 1.
INTRODUCTION
The Malaysian Constitution has listed zakat under the state authority. This provision is in line with the basic concept accepted by the Malaysian Constitution in which all religious affairs should be put under the various state authorities. In Malaysia, though Islam is the religion for the Federation, it doesn't mean that the Federal Government has the fullest authority in religious affairs. The Malay rulers (Sultan) or Yang Dipertuan Agong as Head of Religion have religious authority in their respective states. Each state in Malaysia has formed its own lslamic Administrative law that is in line with the constitutional provision to execute its authority over religious matters. Normally provision related to zakat is part of the law. To implement zakat management tasks, State Enactment and Act for Federal Territories for lslamic Administration all over the country normally would determine the particular institutions to be responsible for zakat affairs. Zakat management and administration in Malaysia is the responsibility of the respective Islamic Religious Council (“Majlis Agama Islam”) of each of the 13 states in Malaysia, with the Federal Territory (FT) of Kuala Lumpur, Putrajaya and Labuan having its own Council, giving a total of 14 Islamic Religious Councils for the country. In fact, zakat collection and distribution are arranged by the Islamic Councils because it is not under the Federal or State Government because all matters concerning religion is the responsibility of the States Islamic Council. Zakat management offices under the respective Islamic Religious Council of each state are normally known as Zakat and Baitulmal Office, Zakat Committee, Zakat Unit or Zakat Department. Apart from zakat collection office, there are zakat officers (amil) who are appointed during the month of Ramadan to collect zakat on Fitrah (Self). Naturally zakat collection and distribution is only one of the many functions of the Islamic Religious Council. Some of the other functions are matters concerning personal and societal adherence and observance of the Muslim faith, mosques, prayers, fasting, marriages, divorces, Islamic education, enforcement of the syariah law, propagation of the Islamic faith, conversion, Muslim welfare, Muslim festivals and wakaf. Therefore, it can be concluded that all religious matters and ceremonial custom of muslim in Malaysia are put under
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the administration of respective states where rulers or Sultan are also the head of the religion. 2.
HISTORY OF ZAKAT ADMINISTRATION IN MALAYSIA
Though zakat institutions in Malaysia particularly has been established for the past 70 years, zakat management has yet to present its actual true potential until early 90's when steps were taken to improve and modernize zakat management and system. There are several reasons that contribute to this situation. Among them: All this while, Islamic Religious Councils has been concentrating on zakat fitr and zakat on agriculture (paddy). Thus, serious consideration on the true potential of zakat of property is not given proper emphasis. The notable cause for this is because the economy of Muslim / Malay community has yet to reach the level that could enable them to pay zakat. However, today, majority of Muslim community in Malaysia is qualified to pay various types of zakat.
The lack of efforts to give wide spread focus and detailed information on the concept of zakat on property to the community as zakat officers or 'amils' do not have clear understanding of the concept of zakat themselves. As a result, there are Muslims who know their zakat obligation on paying zakat but do not know how to pay or make calculation on the amount of zakat that should be paid.
There was also the perception of the public on the effectiveness level of zakat management office especially the distribution aspect in truly helping the poor and needy.
Understanding of zakat among Muslims in Malaysia were still in low level, which can be divided into two categories: i) Those who are totally unaware / ignorant of their obligation and do not make any effort to know about their duties on zakat, this category of people would only pay when legal action is taken against them; ii) Those who know about their obligation but reluctant to pay zakat until they are informed and clarified.
Zakat institution in Malaysia previously was left behind in terms of its management and implementation. Collection and distribution system implemented by the authority concerned was still at the backward state that 3
caused its true potential to be hidden for a long time. This is a big loss as the collection/return could have been invested in socio-economic development of Muslim community in Malaysia.
3.
MODERNZATION IN MANAGEMENT OF ZAKAT IN MALAYSIA
Zakat management and administration in Malaysia took a giant innovative step when the Federal Territories Islamic Religious Council agreed to a proposal forwarded in 1990 by an ex-Menteri Besar of Pahang state, namely Dato’ Haji Abdul Rahim Bakar, that the zakat collection in Federal Territories be made a model using corporate management principles. After a study was done by a consulting firm, the Religious Council agreed to the recommendation of a task force for the setting up of a new office to collect zakat on behalf of the Islamic Religious Council. The new approach includes the incorporation of a new management and administration of zakat collection system by setting up a company under the Islamic Religious Council to separate it from the rest of the administration of Islamic affairs which is very diverse. A new office was set up called “Pusat Pungutan Zakat” (PPZ) or Zakat Collection Centre. The company called “Hartasuci Sdn. Bhd.” manages PPZ and handles all matters pertaining to the collection of zakat on behalf of the Religious Council. PPZ is the zakat office of Federal Territories Islamic Religious Council which started operation on 1st January 1991. PPZ has been receiving payments from Muslims and corporations throughout the country because it is the most systematic and the pioneer of using corporate methods and style of management of zakat collection. All costs of collecting zakat were borne by the company and the Council pays the company management fees monthly as an amil. Zakat collection and the administration of PPZ was computerized which is believed to be the first in the world. On-line zakat counters were specifically opened to serve the zakat payers. All the zakat money collected is banked-in daily into the Islamic Religious Council’s account namely the Baitulmal account. PPZ has responsibility only for collection. The disbursement is the responsibility of the Islamic Department. Generally, the Baitulmal division of the Council being the specific administrator working under a Baitulmal Committee which is one the Committees under the Islamic Council. 4
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The existence of PPZ in the Federal Territories marks a new era in zakat institution as this is the first time a computerized zakat management system is implemented. PPZ operates by giving clear explanation on zakat and its assessment. In addition, new payment counters were introduce for zakat payers. PPZ collects all types of zakat - zakat on income, zakat on businesses, zakat on savings, zakat on shares, zakat on gold and zakat on self (fitrah). For zakat on crops and livestock in the Federal Territories, any business or company doing such activities is deemed to be zakat on business. Apart from the improvement on the counters, payers can also enjoy new services through the multi payment channels such as salary deduction, payment through post/mail, payment at bank counters, payment through phone banking and the internet. Hence, due to the introduction of these various modes of zakat payment since early 1991, the total zakat collection has continued to increase steadily every year. 4.
CHANGES & IMPROVEMENT AFTER CORPORATIZATION OF ZAKAT MANAGEMENT IN MALAYSIA
The increase on the awareness to pay zakat among Muslims in Malaysia today is due to the increasing dakwah efforts and marketing which became more effective in the last 26 years. Thus, efforts by the Islamic Religious Council of Federal Territories by establishing PPZ centre and other State Islamic Religious Councils through zakat Centre could be seen through information campaigns and dakwah which are carried out regularly to increase zakat collection of their respective states. When corporatization becomes widespread in states throughout Malaysia, some positive changes could be seen especially in the administration of state's zakat management. Thus, resulting in committed efforts in developing zakat institutions in the respective states. Among the changes adapted: Enhance capabilities of state's zakat centres to define their actual goals, functions and duties. Corporate work style that is goal-oriented, professional, flexible, less bureaucracy and customer oriented has been adopted.
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The new amil concept (at least at the time it’s been intoduced) or corporate amil which incorporated a more aggressive, professional and teamwork outlook has brought positive feedback among zakat payers and has changed the mindset of the people towards the job. It is also a stark contrast to its conventional style where an amil used to conduct his activities in a mosque.
More committed efforts to develop systems which could enable work to be conducted excellently through better Work System, Internal Auditing System, Finance System, Zakat Collection System, Report System and etc.
More comfortable and attractive office environment with various facilities provided. Plus more convenient for payers to perform their zakat payment through multiple channels. Thus easier to facilitate Muslims to perform their obligations on zakat through multiple channels. The establishment of comfortable service counters has helped to increase the presence of zakat payers. To add, the user-friendly and corporate looking staff who are ever willing to assist zakat payers has also boosted the image of the center.
The improvement help the government and community to realize that zakat institution has the potential to play an important role in managing the community and country if the collection level reaches the size that could give an impact. Thus, enable more distribution program to be introduced by the Islamic Religious Council for the sake of those who deserve to get assistance from zakat fund.
While employment of graduates from various academic backgrounds/fields such as Accountancy, Finance, Business Administration, ICT, Company Administration & Secretarialship, Communication, Public Relations and Islamic Studies. They are recruited to work as a team in contrast to the old concept of 'amil'. In its continuous effort to ensure the highest standard of services to its customers by systematically organized and plan training for its staff. These training and workshops, either held by internal trainers or outsiders, concentrate on staff development in management, operational and administration aspects. Hence, the corporatization efforts have proven successful with the encouraging increase of zakat collection through the years. The actual achievement of is shown in the figures below:
Year
Zakat Collection (RM) 6
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2010 2011 2012 2013 2014 2015 Source: Zakat Report 2006 – 2015
Federal Territory (PPZ) 282,676,073 348,882,925 410,411,327 492,402,029 538,580,526 565,830,627 1 USD = RM4.135
All of the above achievement have been pioneered and achieved by the subsidiary of Islamic Religious Council of Federal Territory known as PPZ since its establishment in 1991 as the forerunner of the modernization of zakat institution in Malaysia. 5.
FEDERAL TERRITORIES RELIGIOUS COUNCIL SUCCESS FACTORS IN ZAKAT COLLECTION
As a subsidiary for the Religious Council of Federal Territories responsible for the collection of zakat of property for the Federal Territories of Kuala Lumpur, Putrajaya and Labuan, PPZ constantly notices and improves its marketing efforts for dakwah on zakat to the Muslim ummah. In Kuala Lumpur, zakat marketing strategy began as early as in 1952 when Kuala Lumpur was still under the administration of the Selangor government. It then later formed the Federal Government Kuala Lumpur in 1974. The marketing strategy used was considered too conservative and lacked funding, which resulted in the overall zakat collection being at a minimum. It did not reach the true potential of zakat. What is meant by the conservative method was that zakat employees had to wait for clients to come to the zakat counters to make payments. In the meantime, the only marketing strategy used was by way of spreading the word which did not help much in the publicity. There were also not enough employees who were skilled in communication and who fully comprehended the concept of zakat. The factors mentioned are weaknesses that influenced the method and marketing strategy before establishment of PPZ. Evidently, after the establishment of PPZ, the zakat institution in Malaysia has been successful in promoting zakat to the Muslim community, and the results are proven in the amount of zakat collected and the increased amount 7
of zakat payers. This has resulted in the changes of zakat institutions in Malaysia, placing it among the same rank as other management institutions. Apart from that, the ability to fully comprehend the concept of zakat, hiring new and trained employees, the introduction of new methods of payment, and the experience of working professionally and corporately, are other contributing factors to the achievements of the zakat institution in Malaysia that one can be proud of. By adopting two corporate strategies such as "Customer Comes First" or "Customer is Number One" and "Pro Active Marketing", PPZ continues to carry out their method of approach which has resulted in the increase in the number of collection and zakat payers for the past 26 years. Among the marketing objectives of PPZ are: lncrease
of zakat collection. lncrease in number of zakat payers. Improvement in the professional management practice based on current technology. Maximise the level of customer satisfaction through services rendered. Create a working environment based on Islamic values. As an agent responsible for promoting zakat to the Muslim community within its 26 years of operation in Kuala Lumpur, Putrajaya and Labuan, PPZ has practiced two methods or marketing strategy; which is 'direct and indirect' marketing. Both these methods are clearly very effective and have greatly increased the total collection as well as the number of payers from year to year. The success story in increasing its collection today is a reflection of its achievement and its capabilities. The contributing factors of this success are as follows :
5.1
Organizational Characteristic
Corporatisation
The establishment of PPZ-MAIWP in the beginning of 1991 by the Islamic Religious Council was felt to be the vital turning point for zakat administration in the Federal Territories and in Malaysia. Since its inception, the corporate culture such as professionalism among its staff has contributed to tremendous improvement and development to the organisation. 8
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Concept of Amil
The new amil concept or corporate amil which incorporates a more aggressive, professional and teamwork outlook has brought positive feedback among zakat payers and has changed the mindset of the people towards the job. It is also a stark contrast to its conventional style where an amil used to conduct his activities in a mosque.
Computerisation System
The use of computerisation system in all PPZ-MAIWP activities such as the collection of data, counter zakat payment, report activities and dissemination of information among the staff has contributed to the efficiency, effectiveness and added competency of PPZ-MAIWP in the planning and orchestrating of its various operations and administration.
Establishment of Service Counters
The establishment of comfortable service counters has helped to increase the presence of zakat payers. To add, the user-friendly and corporate looking staff who are ever willing to assist zakat payers have also boosted the image of the centre. Call Centre
In light of giving and disseminating information on zakat matters, PPZ have established a Call Center in order to answer any question regarding affairs on zakat . This in turn facilitate answering the muslims on any enquires be in the form of calculating and getting various information regarding zakat and its fulfilllement.
5.2
Work Culture
Customer-oriented Services Upholding excellent and outstanding customer-oriented services is PPZMAIWP’s promise to its customers. Phrases such as 'Customer is always right', 'Customer comes first' and 'Customer is no. 1' is the daily work culture practiced by all staff. Hence, this leads to customers’ satisfaction.
Professionalism 9
Staff of PPZ-MAIWP are encouraged to observe the culture of professionalism in carrying out their duties. This is vital as PPZ-MAIWP is an organisation that offers services to the public.
Management and Training
In its continuous effort to ensure the highest standard of services to its customers, PPZ-MAIWP has systematically organised and planned trainings for its staff. These trainings and workshops, either held by internal trainers or experts, concentrate on staff development in management, operational and administration aspects. This is also in fulfillment of an aspect of a requirement set by the MS ISO 9001:2015 and ISMS ISO/IEC 27001:2015.
Teamwork
The aspect of teamwork among PPZ-MAIWP staff has always been identified as one of the crucial success factors of PPZ-MAIWP. Thus, continuous discussion and dialogue sessions are held to provide ample platform for staff to voice out their opinions and perceptions on various work related matters, hence, ensuring the best decision is made at the end of the day.
Work as Ibadah
Staff are also constantly reminded to realise that their work is an act of ibadah. Hence, they should observe positive Islamic work attitudes and strive to be a good Muslim worker at all times.
Employees Incentives
Realising the importance of the present staff to the organisation, PPZ-MAIWP offers various incentives and benefits to its employees. The effort has led to a productive and creative team as well as solved the problem of losing staff to other companies.
Employees as Organisational Assets
PPZ-MAIWP too, realises the fact that its employees are its organisational assets. Each employee has sacrificed countless time, thoughts and energy for the success of PPZ-MAIWP. Hence, it is only befitting for PPZ-MAIWP to play its role and look into the needs of its staff so that both parties are in a 'win-win' situation.
5.3
Economy
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Increment of Gross Domestic Product (GDP) Percentage
One of the factors of the increase in zakat payment is the increase in GDP percentage each year. Malaysia is truly blessed with charismatic and dedicated leaders who are highly knowledgeable to lead her economy. With the continuous increase of GDP percentage since the economic crisis in 1998, unemployment rate has been lowered, thus increasing work opportunities for Malaysians. This results in an increase in overall payers as well as payment. Political Stability
Another important contributing factor is Malaysia's political stability. Malaysians are generally peace loving people who live in a peaceful and harmonious environment. This has been achieved since its independence in 1957 even though it consists of several races such as the Malays, Chinese, Indians, Kadazan and Iban. This stability is definitely a priceless asset to PPZMAIWP in carrying its activities.
5.4
Socio Cultural
The Existence of Middle Class Malays
Since the introduction of the New Economic Plan (NEP) by the Malaysian Government from 1970 to 1990, scores of Malays have benefited in the aspects of economic prosperity. The NEP targeted that the natives 'bumiputera' will gain 30% of the nation’s wealth as a prerequisite to compete with other races in Malaysia. As a result, in the 90s, a new generation of middle class Malays came into being and these Malays held various important positions in the private and governmental sectors. There were also scores of Malays who became successful professionals in various lines of work.
5.5
Law Factor
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Rebate
One exclusive advantage given by the government of Malaysia is the rebate on individual tax from zakat payment. Act 1967 6A (3) of The Income Tax Act states that an individual who has paid zakat via the State Islamic Religious Council will be given a rebate on his / her individual tax provided that a receipt of the zakat payment is produced. Hence, this advantage has helped to ease the burden of a zakat payer.
6.
6.1
MARKETING STRATEGIES FOR COLLECTION
Direct Marketing
As an agent responsible for promoting zakat to the Muslim community within its 26 years of operation in Kuala Lumpur, Putrajaya and Labuan Island, PPZMAIWP has practiced two methods or marketing strategy; which is 'direct and indirect' marketing. Both these methods are clearly very effective and have greatly increased the total collection as well as the number of payers from year to year. Among the direct marketing activity used are:
Zakat Talks/Briefing Dissemination of zakat related information is continuously carried out all year round through talks / briefings. This method has proven to be important especially as it reaches the mass, either in offices or in mosques all around the country.
Services on Zakat Estimation & Assessment Companies
to Individuals and
Since its establishment, PPZ-MAIWP has introduced numerous services with the objective of encouraging the public to make queries pertaining to zakat related matters. PPZ-MAIWP too welcomes initiatives by the public to organize consultation sessions such as on methods of zakat estimation and assessment especially for those who have problems coming to PPZMAIWP service counters.
Zakat Operation & Zakat Campaign Two marketing methods are used to ensure that the public is aware of PPZMAIWP activities. The two methods are ZAKAT OPERATION and ZAKAT 12
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CAMPAIGN. In this two methods, zakat officers will move as a team and station themselves at strategic places such as lobbies of commercial buildings and government offices, housing areas and business premises to distribute pamphlets and zakat forms to the public.
Mosque Operation A method conducted on a rotational basis known as “MOSQUE OPERATION” is an approach carried out specifically during events such as exhibitions, consultations, and tazkirah followed by Friday sermons. This allows those in attendance access to information and queries regarding zakat and its methods of payment.
Follow-ups Another strategy implemented by PPZ-MAIWP is to do a follow-up on companies and individuals who have failed to pay their zakat. This followup will help PPZ-MAIWP to identify reasons for the failures of the zakat payment, hence, allowing PPZ-MAIWP to construct strategies to overcome these factors. It will also help PPZ-MAIWP to ensure that the targeted zakat payment can be achieved during the said year.
Summarize Zakat Report To meet the terms drawn up in the Client Charter, PPZ-MAIWP annually publishes and gives a report to all the muzakki regarding the status of the collection and the number of zakat payers. Furthermore, the report also includes information regarding distribution via programs, projects, and schemes implemented by the Federal Territories Baitulmal throughout the year.
Reminder One method of reminding zakat payers concerning their zakat obligation is through implementing a reminder system. Zakat is an obligation that occurs only once a year, added to that the busy demands of work, the need for a system to remind Muslims of the obligation becomes a necessity.
Greetings Cards Another one of PPZ-MAIWP’s approach through direct marketing is the annual delivering of Eid Mubarak cards and calendars to the zakat payers. Through this practice, each customer will feel special and PPZ-MAIWP would constantly be in their thoughts. 13
Individual / Group Consultant Another method used by PPZ-MAIWP to disseminate knowledge pertaining to zakat is through consultation method. Consultation methods are held for individuals as well as for a group. This method will help to further clarify and explain zakat matters in a clear 'direct marketing' manner.
Group Zakat Collection The group zakat collection is a method whereby PPZ-MAIWP will open counters via invitation from offices either from the public or private sectors. This effort is introduced with the objective of helping those who are unable to go to PPZ-MAIWP service counters due to the constraints of time and occupation.
Salary Deduction Campaign To help ease the burden of zakat payment among the public, PPZ-MAIWP has introduced the salary deduction scheme since 1991. This scheme is seen as an effort by PPZ-MAIWP to help ease the burden of the zakat payers so that it would match the payers’ financial capabilities.
Appointments All year round, attention is given to individuals and groups that require further clarification regarding the practice of zakat.
6.2
Indirect Marketing
Although the effectiveness of dakwah through direct marketing has already been proven, PPZ-MAIWP nevertheless is also applying indirect marketing methods to propagate zakat to the Muslims as part of PPZ-MAIWP’s obligation towards the Religious Council of Federal Territories. These include:
TV
The appearance of PPZ-MAIWP staff on public and privatised TV from time to time is the best method of reaching potential payers from all over the country. This approach not only directly benefits PPZ-MAIWP but also assists other zakat institutions nationwide in the dakwah effort and they indirectly become recipients of zakat collection from the rest of the Muslim community in Malaysia.
Radio
Likewise, occasional appearances on public and privatised radio stations by the PPZ-MAIWP staff also help the dakwah effort. Exposures from these two 14
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medium; TV and radio are very effective in the creation of a good image. It becomes a constant reminder to the community that PPZ-MAIWP is always there for them.
Sermon
The opportunity offered by the Religious Council of Federal Territories which allows PPZ-MAIWP to inform and educate the Muslim communities in the Federal Territories of Kuala Lumpur, Putrajaya and Labuan PPZ-MAIWP is another indirect means of approach utilized by PPZ-MAIWP. The chance to give lectures during Friday prayers in the month of Ramadan and December is used fully by PPZ-MAIWP to disseminate information on zakat.
Presentation
In comparison, briefings are given to smaller groups of people while lectures are targeted to much larger groups. Briefings allow PPZ-MAIWP staff to focus exclusively on explaining and answering all enquiries thoroughly. This approach is normally employed specifically to address smaller groups within companies, societies, NGO’s, and other groups that require this method.
Group Assessment & Collection
Another method of indirect marketing is through organizing group collections. This activity is carried out intermittently and at times set up as a permanent feature depending on the time and place as a convenience for the busy citizens of Federal Territories. This method helps those who have no time to spare for a visit to the PPZ-MAIWP office and contend with lack of parking spaces. These problems can be solved by calling the PPZ-MAIWP staff to their work place to set up temporary payment counters without having to leave their office to fulfill their zakat obligations.
Flyers/Posters Distribution
Recognizing that efforts to raise awareness among the Muslim community concerning the zakat obligation are not easy, PPZ-MAIWP also practices the collective method of distributing printed matters such as pamphlets and flyers. This method clearly has added benefits whereby the payers or potential payers would receive the printed materials in their mailboxes without having to visit the PPZ-MAIWP office. If they are interested in making payments, they only have to post the form together with their cheque, money order or bank draft using the envelope addressed to PPZ-MAIWP which has been provided.
Exhibitions 15
To ensure the expansion of dakwah efforts, promotions through the setting up of booths during exhibitions are also adopted by PPZ-MAIWP. Events such as Convocation Fairs, selected weeks, Government Ministry Open Days and Muslim festivals such as Maulidur Rasul and so forth become an excellent and efficient gathering place.
Zakat Seminar
Zakat seminars on various issues such as zakat for business, co-operative societies and paymasters are continuously held to fulfill different needs such as financial management, human resource management and businessman to raise awareness on the responsibility towards zakat.
Info day
Efforts to promote and propagate zakat products to the general public are often in collaboration with Government Ministries as well as governing bodies and private sectors. Activities are held in conjunction with Ministry’s Open Day, Convocation Fairs, Launches, Expo and so forth.
Zakat Talks / Briefing
Dissemination of zakat related information is continuously carried out all year round through talks / briefings. This method has proven to be important especially as it reaches the mass, either in offices or in mosques all around the country.
7.
FEDERAL TERRITORIES RELIGIOUS COUNCIL – ZAKAT DISTRIBUTION PROGRAMMES
Zakat distribution aims to change the lives of the poverty-stricken by enabling them to afford to live a comfortable life. Al-Qardawi mentioned that the distribution of zakat serves to cater for the needs of its recipient. For this purpose, zakat is not necessarily given to all recipients if there are those that are in need of more zakat. According to him, the government has the authority to identify ways to distribute zakat. With regard to this, the obligatory nature of zakat should become a catalyst to assist Muslims in four aspects through the goal of zakat distribution: to resolve poverty issue, to establish social justice, to develop a society based on love, mutual solidarity, brotherhood and to eliminate from the poor the feelings of hatred that they may harbour towards the rich. Further, zakat has its own strength as it unites the Muslims, build better relations among them and encourage Muslims to work together. Zakat also should be for the purpose of 16
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being a welfare instrument to overcome economic issues or as a means to stabilize the economy of the Muslims. In most of the states in Malaysia, zakat fund distributions have increase from year to year. Projects and assistance aid has been enhanced due to the increase in the zakat collection annually. Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Zakat Report 2006 – 2015
Zakat Distribution (RM) Federal Territory (MAIWP) 101,548,407 121,224,318 167,507,847 174,986,013 200,541,409 217,246,481 271,967,597 328,394,455 419,225,908 612,747,408 1 USD = RM4.135
It is compulsory in Islam, as far as Zakat collection and gathering are concerned, to be distributed to those who really in need and who belong only to these eight categories mentioned in the Holly Koran in the following Ayat: “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.” Surah At-Taubah ayat 60. Taking the Federal Territories as an example, disbursement of zakat is under the responsibility of the Federal Territories Islamic Council. The administration specifically is done by the Baitulmal division in MAWIP. There is also a Baitulmal Committee reporting to the Council and this Committee approves the applications for Baitulmal funds from applicants after the normal processing is done by offices of the division. When applications for zakat funds or programs and projects are being considered, the Committee and the Council is always mindful that it should fall under one of the eight categories (asnaf) for spending of zakat fund and that it fits in with the overall objective of zakat. 17
Relevant Institutions were established by the MAIWP as methods of distributing the zakat fund to the respective asnaf. Among the institutions established for helping the asnaf are: Baitulmal
Vocational Institute. Established as a platform to reduce poverty among muslim family by providing skill / vocational training to the family members. Training on development of skills given to the children of the poor from all over the country like sewing, creative drawing, cooking, food catering, electrical wiring, batik printing and building & construction courses. It also provide free training courses, monthly allowance and accommodation to trainees. Baitulmal
Profesional Institute. Operating as a private institute of Higher Learning which offers Diploma and Certified courses like Charted Secretaries and Administrators, accounting, computer, business administration etc. Pusat Rawatan
Islam - PUSRAWI [Islamic Medical Centre]. The first medical centre in the country that provides medical services using Islamic approach not only catering for the Muslim but open to all. Darul
Kifayah. Operating as an orphanage house for children who come from a very poor family. Occupants in this centre are provided with daily expenses and their education cost are fully born by the Religious Council of the Federal Territories. Darul
As Sa'adah. Operating as a centre for problematic Muslim individuals who has no where to stay and no one to rely on. It is also a rehabilitation centre for immoral Muslim girls. Occupants will be given guidance of Islamic Principles. Islamic
Kindergartens. Offer pre-school education to children age 56 years old as preparation for primary education. MAIWP
Islamic Secondary School (SMA-MAIWP). Established in 2007 to provide Islamic secondary education in Federal Territory Science Tahfiz Integrated Secondary School (SMISTA).
Established in 2011 as platform to train young generation to become Al-Quran memorizer and will widely spread in various job markets in the future. This system combines two education curriculums which is National Curriculum & Memorizing Al-Quran. 18
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Apart from the above establishments, Baitulmal of Federal Territory is also engaged in giving out short term/monthly aid under the various asnafs in helping them to get better living conditions and also to continue their livelihood. Such programmes and expenditure are : Poor
and Needy (Fuqara' Wal Masakin). Which included aid of food, finance, medical, Ramadan aid, rent and marriage aid. This segment also included scholarships, educational aid, uniforms, bags, shoes, emergency, disaster aid, skills training, business aid, house repairs or construction, aid for disability and shelter for women and children. New
Converts / Those Whose Hearts Are To Be Reconciled (Muallaf). Religious instruction, aid for temporary shelter, aid to organizations undertaking dakwah and marriage aid. Zakat
Collectors and Administration (Amil). To pay expenses for zakat collection, administration and development so that all the programmes and aid can be carried out efficiently and effectively especially in helping the destitute and poor. To
Free Slaves / Captives (Al-Riqab). To suit modern needs, aid is given: To free Muslim from ignorance, to free a Muslim community from very oppressive conditions and to free those trapped in prostitutions. Those in Debts (AIGharimin). Which help such as food debts, educational debts, medical treatment debts, rental debts, funeral expenses debts, petty trader's debts. The
Cause of Allah (Fisabilillah). Dakwah activities (individuals and organizations), seminar, workshops and activities carried by universities, schools and associations that help to develop Muslims, especially students and youths. Also included publications of dakwah materials /books. Travellers
(Ibnu Sabil). Aid to stranded travellers.
Zakat distribution using the conventional method is mainly dividing the zakat fund to every asnaf (categories of people entitled for zakat). However, this method has been revised. Zakat distribution using the conventional method is mainly dividing the zakat fund equalld to a more efficient and practical way approved by the Syaria' Consulting Committee Meeting. The fiqh scholars has 19
unanimously agreed that zakat fund will be distributed accordingly based on priority which are faqir, miskin, amil followed by the other asnaf. To ensure transparency in zakat allocation, Internal Audit Unit carry out the auditing prior to audit carried out by the General Audit Department. The Federal Territories Islamic Council believes in giving effective and excellent services to recipients from the schemes offered to them. The council also opens its door to any constructive criticism and suggestions for the development and benefit of the Ummah especially in the Federal Territories.
8.
FACTORS IN ESTABLISIHNG AN EFFECTIVE AND EFFICIENT ZAKAT INSTITUTION
Although we could say that the administration of zakat institutions has undergone many improvements thus far, there are still vital issues pertaining in establishing an effective and efficient zakat institution. Previous studies in various fields shows that the challenges in the management of zakat institution is divided in two, namely internal and external factors. Internal factors refers to aspects of administration and management. While external factors also include the technical aspects and the perception of outsiders.
Some of the underlining issues includes:
The need to upgrade efficiency – Internal There is a need to enhance/strengthen zakat management system to address the inefficiency issue especially in the distribution aspect. Generally, zakat is normally given based on application and sometimes based on public report or initiatives carried out by zakat institution itself. Apart from that, bureaucracy plays another role where in the process of distributing zakat. Therefore, the principle that should be practise is that zakat collected should be disburse as soon as possible. This was the practise of the Prophet (pbuh).
The need to actively scout for prospective payers - Internal The transformation in zakat institution could be done by improving the ability of zakat collection centers to identify not only those who should pay zakat, but also to trace down the prospective zakat payers. For this purpose, the authority needs to change the method of collecting zakat from waiting at the counters to proactively organizing briefing and talks 20
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session on the importance of zakat to all walks of life. This initiative may raise awareness among prospective zakat payers to fulfil their religious obligation.
The need to enhance Capital Building for asnaf - Internal Although eradicating poverty is an inspiration of all people, it is not an easy task. Helping the asnafs by directly giving them a sum of money to buy necessities is indeed only a short term solution. Zakat institutions could change the way financial assistance is given including in the form of financing children’s education or sending then to training centres to gain certain skills and knowledge thus getting employment to elaviate asnaf from poverty.
The need to upgrade Management of Human Resourse Development – Internal Human resources is one of the biggest challenge for a zakat institution. Those who wish to be employed must be an amil as outlined by the ulama’, namely, a muslim, which capable of performing the job, understands the work and having a sense of honesty in their work. Therefore, Human Resource Management must also ensure that each post is in accordance with the qualification. This is to ensure that the work as amil can be carried out accurately and precisely.
The need to update to the best and latest Information Technology System - Internal Zakat institutions must follow the latest developments in information technology. This is to ensure that the payment of zakat can be carried out quickly and accurately. With the attitude of zakat payers who are exposed to the latest technology and fast service, Zakat Institution must be prepared to ensure all amils are equipped with such latest and up todate technologies.
The need to strengthen Internal Control – Internal Zakat Institution should take appropriate action to establish the Internal Audit Committee to ensure that action is taken accordance with established procedures. At the same time external auditor plays a role in monitoring the activities undertaken by Zakat Institution. Certification of MS ISO 9001:2015 also ensures that procedures involving acceptance 21
and distribution of zakat funds. Zakat Institutions should also manage to obtain certification for Information Security Management System (ISMS) ISO/IEC 27001:2015. ISMS is a method to control information system and networks in order to minimize risk.
The need to correct the wrong perception on zakat fund surplus – External Basically the community sees that zakat institutions did not make proper distribution of surplus zakat fund each year. This phenomenon is caused by factors whereby payment of zakat received towards the end of each year. Therefore, Zakat Institution must be able to plan and distribute zakat fund in such a way to accommodate asnaf diligently.
The need to change the beliefs on zakat obligation - External Different beliefs arise due to earlier generation of scholars who adapted ibadah of zakat according to their times. Thus this generation who holds on to old practices and makes it difficult for any new approach to the payment of zakat. Therefore there is a need to educate the Muslim in adapting to new understanding of zakat obligation.
The need to eliminate confusion between Zakat Obligation versus CSR - External In some countries, like Malaysia Zakat payment especially by businesses institution faces difficulties in paying zakat on business compared to paying corporate tax. In order to lessen the burden of paying double taxation on zakat and corporate tax, Companies is likely to pay corporate tax since zakat is considered not compulsory whereas corporate tax is punishable by law. The need to eliminate Improper Channel for Zakat Distribution by Payers - External There are zakat payers who distribute zakat payments directly to asnafs. The reasons used by the zakat payers is that they do not trust in the zakat institution in delivering zakat funds. The impact of such actions will lead to eligible recipients deprived of their rights. Therefore, there is need for Zakat Institution to really educate zakat payers their obligations to pay zakat to the the respective authorities.
9.
CONCLUSION
Zakat institutions has offered numerous advantages to Muslims. Being a religious duty, it offers the payers the inner satisfaction of a duty accomplished. It induces a feeling of pleasure in awareness among prospective payers to fulfil 22
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their religious obligations and by teaching that only those funds on which the due zakat has been paid are halal (legitimate) for appropriation or consumption. The institution of zakat should not be understood only as an act of ritual but its significance is also intended at achieving social justice. Social justice implies that each and every individual in a community is assured of a minimum means of livelihood. Islam insists that every individual member of the society must be able to participate and contribute to nation building. This can be achieved when individuals have fulfilled their basic needs. The Zakat Institution clarifies clearly that the Islamic approach to ritual exercise is not only to purify oneself and to uplift individual morality but also to organise society in all aspects of its requirement. Therefore, the collection and disbursement of zakat have some economic implications. It is impossible to find or single out a particular zakat institution that has reached a standard of effective and efficient in its administration of zakat fund. Nevertheless, this paper was able to present an example of an institution which has been in operation for almost forty three years in Malaysia. i.e. Federal Territories Religious Islamic Council. Although this institution tried to implement zakat administration to its outmost best, however it would not escape from being the target of criticisms from the Muslim Community over the years. Looking at the positive angle, this shows that Zakat Institutions is still relevant and well-loved and given sincere attention by the Muslim community. It is the hope of all Muslim to see excellence in zakat administration can really be achieved as occurred during Caliph Umar Abdul Aziz, where no Muslim is eligible to zakat fund due to its excellence in term of zakat administration coupled by effective and efficient rules of an Islamic Nation during that glorious time. Wassalam, HAJI MOHD RAIS HAJI ALIAS Zakat Collection Centre Federal Territories Religious Council, Malaysia Website :www.zakat.com.my E-mail :
[email protected] Tel : 1300-88-5757 23