Business Zakat As Poverty Eradication Mechanism

Abstract

Paying zakat is an obligation for every Muslim who is mukallaf - someone who meets all the conditions contained in the five pillars of Islam. Likewise, similar obligation needs to be fulfilled by a Muslim who is involved in a business activity. The Annual Report published by the Federal Territory Zakat Collection Centre (PPZMAIWP) for 2020 shows that there was an increase of 7.76 percent in total business zakat collection, amounting to RM112,947,206.23 in 2019, compared to only RM114,096,123.422020 in 2020. However, based on statistics by categories, zakat collection on businesses still could not surpass the total number of zakat income collection which amounted to RM471 million in 2019 and RM511 million in 2020, an increase of 8.34 percent. There was nonetheless a significant increase of 47.08 percent in 2020 of the total zakat payment on businesses in comparison to the 9.16 percent increase in the total zakat income payments recorded in the same year. The statistics published have led to the birth of various interpretations within the community on the role of business zakat as an economic catalyst for the ummah (“people” or “group” or “community”) . Therefore, this study aims to gain an in-depth insight into the issues and challenges faced by business zakat payers in fulfilling their religious obligation. For the purpose of data collection, this study utilized focused group interviews on a selected group of Muslim entrepreneurs in the state of Kelantan. The results of the study exhibit a number of existing set of problems and challenges faced before, during and after the implementation of business zakat.