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Administration and Economic Aspect of Zakat - Coggle Diagram
Administration and Economic Aspect of Zakat
Relationship to economic growth
Zakat is an religious obligation to be discharge annually
Payment should be made where wealth is generated (working at KL, pay zakat at KL)
Localized or restricted to a particular community
Zakat should be in liquid asset to be distributed to
asnaf
Zakat indicates availability of fund to be utilized by Zakat mgmt body
Distribution and Governance
Framework in Malaysia
Federal constitution, 9thSch (List II) mentioned collection of Zakat fitrah or any other Religious revenue
Federal constitution Article 74,77
JAWHAR - Jabatan Wakaf, Zakat & Haji ( PM Dept 2004) to manage Muslim assets in
Each state with have its own framework
Collection Rate
Flat rate 2.5% for gold, silver, income etc
Zakat assessment based on assets where income tax based on income (assets = fixed + liquid assets +inflow income)
Had Kifayah
Zakat Selangor use this (limit of sufficiency) as benchmark to determine if one is eligible or not
Household below HK entitled to receive zakat
HK use to only determine Miskin and Fuqara asnaf. Not applicable for other category of Zakat
Models of distribution
Consumption - cash, products and service of multiple use
Productive - economic / biz activities
Dakwah and Human Capital Development (Modal Insan)
Distribution Schemes
Financial / Business / Education aid
Deposit for HP taxi
Repair / build low cost house
House / water / electricity
Religion classes
Disaster / Debt settlement aid
Mosque officers
School and examination aid
Course, Training & Skills aid
Role of Zakat authorities
14 religious counter
collection focus on income and business
Compulsory for Muslim - income, asset , commodities
Condition for Zakat Obligations
Free
Slaves not required to pay zakat except zakat fitrah
Islam
Only imposed to Muslim
If shared with Muslim and non Muslim, only Muslim portion will be imposed
Completeness of Ownership
Owner must own the properties, utilize it and gain benefit
Must have complete and unencumbered possession and assets
Mixed ownership only compulsory upon equity held by Muslim
Hawl
Completion of one year
Nisbah valuation
Threshold / min zakatable value
Based on 85gm gold, when exceed nisbah need to pay 2.5% zakat
Other conditions
Growth assets - bond, securities, investment
Raw material are exempted, however revenue from fixed assets are zakatable
Business
Imposed on the consolidated capital not by individual capital provider
All shariah and permissible business
Fixed asset and long term investment to be excluded
Urfiyyah
Equity of ownership and other financial sources
Syariyyah
Current assets after deduct liabilities
Condition of Wealth
Halal
Liquid, immovable assets if held as stock for sale
Growth and productive features
Excess from basic needs
Meant for trade
Who have completed and unencumbered assets
Mixed ownership - compulsary for equity held by Muslim
Who pay Zakat?
Muslim individual regardless age and mental condition
Controlled business entities
Minorities business entity - Muslim as shareholder
Companies belongs to govt
Guardian of Zakat liable Muslim orphan