Business zakat compliance in Algeria: an ethical perspective

Abstract

Purpose This research aims to investigate the influence of political instability, trust and knowledge on the zakat compliance behaviour of Algerian business owners. Based on the lenses of the ethical theory mainly and by reference to Zakat Core Principles (that originally inspired from the Basel Core Principles), the paper aims to provide an understanding of how these factors affect zakat compliance in the Algerian context from an ethical perspective. Design/methodology/approach A cross-sectional research design was applied. Using self-administered questionnaires, a total of 575 business owners in Algeria participated in this study. The hypothesised model was tested by using the partial least squares structural equation model. Findings The study results support that the ethical approach can explain zakat compliance among Algerian business owners. Specifically, the results revealed that political instability, zakat knowledge and trust significantly influence zakat compliance. Practical implications The results offer meaningful insights for the zakat institutions in Muslim societies to enable them to formulate zakat collection policies, assess the level of societal trust in the zakat authority, evaluate the influence of political instability on Muslim entrepreneurs’ zakat compliance and strengthen the entrepreneurs’ zakat knowledge on the exigency of paying zakat to the authority. Originality/value This study breaks new ground by exploring the effects of political instability, zakat knowledge and trust on zakat payers’ compliance ethical decisions in developing countries such as Algeria. More significantly, this research contributes to the existing literature of the ethical theory specifically by investigating the effect of political instability on zakat compliance among Algerian business owners.