Zakat in Malaysia

From: Eugene Hassan Hazer
Pusat Pungutan Zakat - Kuala Lumpur

To answer your queries, let me explain generally the distinction between the 2 main types of zakat :

  1. zakat on self (zakat fitr or fitrah);
  2. and zakat on wealth (zakat mal),
the latter actually comprising all the other types of zakat, such as on business, on savings, on income, on crops, on livestock, on gold, on minerals, on hidden treasures unearthed, etc.

Zakat on self is a per head payment about USD1.30 per head (originally in terms of wheat or dates or rice of about 2.25 kilogram) paid during the month of Ramadhan by the head of a family for himself and his dependents to the zakat collector (amil) for purpose of onward distribution to the less fortunate so that they can also celebrate the completion of the Ramadhan month compulsory- fasting,the celebration being on the 1st of Syawal month (it ensues immediately after Ramadhan month) called 'Idil Fitri'.

The USD1.30 is a currency eqv of the Malaysian zakat fitrah rate of ringgit 3.30 per person. The proper US rate for zakat on self (zakat fitrah) in USA should be the current purchasing power to buy food for another needy person for one meal, i.e. the needy person can join in celebrating the completion of the Ramadhan-month fasting. Another way of looking at it: what is the cost of 2.25 kilo of wheat in US, the money value of that can be the zakat rate on self payable by an eligible zakat payer to another needy Muslim. In a community or country where there is no organised system for collection of zakat, then the payment can be made direct by the payer to the poor families. The cut off time for payment or giving of zakat is just before the start of the Idil Fitri prayers.

On the other hand,the zakat on wealth is payable by a payer at any time of the year after his 12 months ('haul') of his wealth reaching or exceeding the exemption limit ('nisab'). The rate is 2.5% of zakatable wealth. For crops, it need not be a year,but immediately after harvesting. The rate is 10%

The zakat should be given to the zakat authority, if it exists in a community or country, because the purpose is more widespread than zakat fitr. Zakat on wealth is for 8 categories of receipients or uses, namely the destitute, the poor, the collectors/zakat administration costs, the new converts, to free slaves, to pay for some types of debts, for activities or programs to defend / spread the religion, and lastly, for stranded wayfarers/travellers.

Now, to answer specifically:

Q1. Based on Malaysian experience/situation, practically all eligible Muslims pay zakat on self (zakat fitrah). The family head will go to the authorised 'amil' or zakat collector appointed by the respective Islamic Affairs Council (each state in Malaysia has a Council - there are 14 Councils) during Ramadhan fasting month, or not later than the morning of 1st Swawal month before Idil Fitri prayers, to pay zakat fitrah. In Malaysia, payment is received from about 11 million persons at about Malaysian Ringgit 3.30 per person out of a total Muslim population of about 12 million, (gross about 33 million ringgit for this type of zakat alone, out of a total of about 130 million ringgit all types).

As for zakat on wealth, the fulfilling of this duty is about 1 out of 5 eligible persons currently, since the awareness campaign is relatively new. Only when PPZ - 'Pusat Pungutan Zakat' (zakat collection centre) was set up in 1991 that the campaign to raise consciousness of paying zakat on wealth, instead of the usual zakat on self, seriously begun and the management /administration made more systematic, including computerisation.

The big picture for most countries, we understand, is the same, that is quite diligent payment of zakat fitr, and very low percentage paying zakat on wealth. Some of the reasons could be attributed to lack of an organised system and no clear authority, especially in distribution of the zakat already collected.

Q2. In Malaysia, the Islamic Affairs Councils of the various states and the Federal Territory of Kuala Lumpur organise the collection and distribution of zakat. Distribution is not just giving of monthly cash to the destitute and poor especially the old and invalid, but the running of various aid programs and setting up of homes and centres. The syariah (Muslim law) advises that it is the responsibility of the government to set up a proper administration for collecting and distributing zakat (assuming its a Muslim majority), but in most countries, it is left for the Muslim communities to organise it. The confidence factor then comes into play. If a community has agreed generally that a certain organisation should be responsible, then zakat should be channeled to it. The organisation must then organise the programs and channel of distribution, within the prescribed categories.Administration costs for example are allowed, but must never exceed 1/8th of total zakat available. Paying direct to the needy individually would not create long term and sustained benefits, and there won't be a zakat institution to be responsible overall.

Q3. Organisation: Malaysia may be unique in having a clear authority to collect and distribute zakat for each state recognised by both the government and the community, so choice does not arise. But for countries or communities not organised properly, then the organisation given the mandate by the majority of Muslims in the state or area should be the channel. The concept of community centring on the local mosque, can be the choice. The mosque council selected at annual meetings of the community can be the organisation to fulfill the role. Proper administration is the rule and the prequisite to gain confidence. So it is a question of trust, responsibility and obligation in adhering to a commandment of God.

Q4.There are definitely variations in interpretations. But many of the main aspects of zakat are uniform. In the end ,what matters is for individuals who have been blessed by Allah with a certain level or amount of wealth that exceed the 'nisab' and have completed the 12 months 'haul' to do their duty of obeying Allah's command.

In Malaysia, the approach of PPZ (zakat collection centre) Kuala Lumpur is to give guidelines and explanations, and the rest is up to each individual's conscience. The jump in collections 6 times of that 5 years ago is proof of the soundness of this approach. Of course there are those who argue that force must be used, even 'declaring war' on reluctant Muslims.

Q5.The best book in our view is the one written by Professor Dr Yusuf AL-Qardhawi "Fiqh Zakat" (Muassah Al Risalah, Beirut, Lebanon,1973) . Websites - well, you have the experience to browse and spot them. In terms of practical models and pragmatism, then we believe the PPZ way in Kuala Lumpur is the modern day model for zakat collection.

In conclusion, we believe that a proper organisation of zakat operations in various communities of Muslims, whether they live under Muslim or non Muslim governments is the key, not the examination of detail explanation of zakat laws or fiqh. People will pay to organisations entrusted with zakat only when they are confident of its administration, otherwise they will look for deserving families and programs on their own.

So much of the stuff on the internet about zakat are just pointless examination and arguments about what those individuals think should be the correct interpretation of zakat laws. No doubt,some reflect general consensus. Time could be more productively spent on how to make Muslims better off economically, smarter businessmen, create more prosperous societies - eventually, everbody becoming zakat payers! That is the real added value. Allah knows best.

Haji Mohamed Dahan,PPZ. Add/View Comments to this page.

The Zakat Society