The Centralized Zakat Management System in Solving Zakat Management Issues in Malaysia

Abstract

Zakat is the third pillar of Islam and often associated as a tool to alleviate poverty. Proper execution, processes, and management of zakat from collection to distribution of zakat should result in the alleviation of poverty and improvement in quality of life for the less fortunate. However, in a Muslim majority country such as Malaysia, where not only is zakat collected regularly, with multiple zakat bodies taking on the role of managing zakat, the issue of poverty remains. This indicates a flaw within the existing zakat management system whereby there is either a lag between the funds collected and funds distributed, or the zakat management is inefficient. The chapter studies the current practices of zakat collection and disbursement in Malaysia while highlighting the relevant issues. Subsequently, developing a conceptual framework of a centralised zakat management through the enhancement of IT infrastructure. The main objective of the proposed framework is to improve the efficiency of the zakat collection and disbursement by establishing a consolidated database which will be accessible by all zakat authorities and creating strategic partnership with relevant authorities and organisations. These steps will promote the sharing of information, verification of information, and reduce the number of redundancy and conflicting information of zakat recipients. Ultimately, the end goal is to shorten the transaction time of funds from contributors to recipients through a systematic and orderly manner.