Towards A Unified Zakat System

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In Saudi Arabia, the Zakat Department is responsible forcollecting and distributing Zakat. According to theMinistry of Finance, royal decree no. 17/2/28/3321 of11/2/1950, Zakat is collected from individuals andcompanies of Saudi nationality. The basic idea for thecollection of Zakat is to be consistent with the Shariahand to allow the Zakat Department to collect Zakat, asimposed by the government of Saudi Arabia, and according toIslam, which was imposed by Allah. In 1963, decree no.61/5/1, the amount collected by Zakat Department should betransferred from the Ministry of Finance treasury to theSocial Security Institution treasury to be distributed bythem to the needy. In the other countries, no regulationhas yet been set for the collection or distribution ofZakat, so Islamic banks and charitable organisations inthose countries deal with Zakat; accepting it from anyonewho will pay it and distributing it (if requested,according to the depositors' recommendations). It was,therefore, important to investigate the perceptions of theselected respondent groups regarding Zakat collection anddistribution.Research question (8)" What are the various perceptions, of the selectedgroups of respondents, of efficient means ofcollecting and distributing Zakat?166
5.2.8 Variations in accounting measurementIn line with conventional accounting, adopted by developedcountries, accounting measurement and disclosure in theIslamic countries are flexible and allow for differentmethods to be used. Variations in accounting measurementand disclosure of Zakat are explained below.5.2.9.1 Depreciation of fixed assetsAccording to the Ministry of Finance (1988) depreciation offixed assets is considered to be a discounted expenditure,in line with Circulation No. 12025/2/1 dated 18.12.1392H,issued by the Department of Zakat and Income, provided thatthe:a) fixed assets are owned by the firm;b) fixed assets are depreciable;c) fixed assets are used in the firm's activity;d) depreciation is for one complete year, except in the casewhere an asset has only begun to be used during the year;e) depreciation is measurable according to the specifiedpercentages as a maximum limit by the department and onthe basis of cost actuality of fixed assets.167
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Towardsa unified system ofZakat acc
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ACKNOWLEDGEMENTSIN THE NAME OF ALLA
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PAGINATION ERROR INORIGINALTHESIS
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ContentsPageDeclarationiDedicationi
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4.4.1.1 Zakat on pastoral animals 1
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6.2.5 The percentage of Zakat thats
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List of tablesPageTable 2.1 Economi
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GLOSSARY OF TERMSFai property acqui
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ChapteroneIntroduction
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interest investment model, where th
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egulating Zakat has been employed a
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four countries due to the limitatio
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Co-operation Council, location, cli
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Chapter seven summarises thefinding
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ChaptertwoGeneral background to the
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in the following section, various f
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have an oil-based economy. Its oil
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anking and investment institutions
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2.1.2 KuwaitKuwait is situated at t
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2.1.2.2 Social, Cultural and politi
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Saudi Arabia is a monarchy, with st
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In addition, Saudi Arabia is also p
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important to the everyday life of S
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and the city of Abu Dhabi is the ce
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2.1.4.2 Social, Cultural and politi
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The Omani economy mainly depends on
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In recent years, the government has
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sv2ýJbbQr N m N n O h CC o O n h O
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11 percent in 1995. In Kuwait, the
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general. All countries, except Qata
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with, they all share the same faith
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" Agreement on linking the electric
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2.4 An example of Zakat regulationA
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offices throughout the Saudi Kingdo
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future is uncertain. In trying to s
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ChapterthreePrinciples of Islamic E
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and equitable distribution of incom
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has two main sources: primary and s
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Although various Islamic schools an
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Muslim countries such as Pakistan a
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This definition also suffers from s
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elationship that a human being must
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The search for lawful wealth is reg
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from place to place and from time t
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Movement towards greater economic a
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3.4.5 Freedom of ownership and acti
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Public ownership is also recognised
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ates in his Code and suggested the
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These last verses clearly show that
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orrower for the period of time the
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choose and what maximises their uti
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eliminated at the outset in Islam.
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aspect of self-interest he or she s
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it can be said that an Islamic gove
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certain circumstances not. to cance
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3.9 Islamic Economics in Practice.A
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deficit for many years. Pakistan an
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It was argued that the goal of well
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economic activities, social and eco
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ChapterfourZakat and its position i
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Although these methods are currentl
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4.1.1 Goals of ZakatMany Muslim sch
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them to contribute positively to th
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een distributed to non-profit Musli
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sectors of the Sunni Islamic sect,
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4.3.2 WealthThe teachings of the pr
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Islam without regard to any debt on
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Page 141 and 142: example,today is the date that Zaka
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Page 145 and 146: Prophet's obligations. The amount o
Page 147 and 148: 4.4.4.2 Starting point of Zakat dut
Page 149 and 150: such as income earned from practisi
Page 151 and 152: There is a widely known view of Mal
Page 153 and 154: amount (2.5 percent). In Saudi Arab
Page 155 and 156: 4.5.2 Department of General IncomeE
Page 157 and 158: He further describes some condition
Page 159 and 160: year. Zakat is payable on both the
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Page 163 and 164: therefore, make a list of the avera
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Page 167 and 168: Balance Sheet 31-12-19X230-12-XXX13
Page 169 and 170: literature behind the selection of
Page 171 and 172: Zakat system supposedly to be appli
Page 173 and 174: ChapterfiveResearchmethodology5.0 I
Page 175 and 176: 5.2 Research questions5.2.1 Zakat p
Page 177 and 178: distribution to those deserving it
Page 179 and 180: egulation, 1988). Companies, using
Page 181 and 182: 5.2.5 Zakat regulationRegulating Za
Page 183 and 184: capital owners (Article 70).The mea
Page 185: authorities and securities regulato
Page 189 and 190: applicability to part of the capita
Page 191 and 192: then they must be discounted since
Page 193 and 194: as well as with the standard for th
Page 195 and 196: 5.2.10 Percentage of ZakatWhen Zaka
Page 197 and 198: 5.2.12 Zakat location in the annual
Page 199 and 200: Zakat payer are added to the profit
Page 201 and 202: ich. This is what Islam stands agai
Page 203 and 204: eing to make it Islamic, strong, gr
Page 205 and 206: the present study would have been p
Page 207 and 208: a wide geographical area, involving
Page 209 and 210: The fifth and last part sought the
Page 211 and 212: academics, government officials, in
Page 213 and 214: Kuwait. Some individual investors c
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Page 219 and 220: KW=12LNNk2 I+ 1) j=1Ellýj-3(N + 1)
Page 221 and 222: ChaptersixStatisticalanalysisofthes
Page 223 and 224: analysis of respondents background
Page 225 and 226: Education and age are not the only
Page 227 and 228: years. Twenty-three percent reveale
Page 229 and 230: 6.2 Major results6.2.1 Zakat paymen
Page 231 and 232: Al-Sultan (1997) who argued that Mu
Page 233 and 234: Department of Zakat, but not to the
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to the national banks where the mea
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difference in means is highly insig
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collect and distribute only 1.25 pe
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The ranking of institutions' means
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Firstly, occupation seems to affect
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It was, however, roughly find two f
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collection), as the chi-square stat
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financial statements such as profit
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like to be on the safe side as far
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It is uncontested that the degree o
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espondentsseem to share some doubt
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score to themselves on the suggesti
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statistics were not significant at
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Secondly, Gulf countries have not y
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Table 6.13(b)Reasons behind low lev
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Alms (Zakat) are for the poor, the
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Table 6.14(b) Appointment and pay f
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five out of seven items, suggesting
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discussed earlier remains unchanged
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4.61. The opinion of accounting fir
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6.5 SummaryThis chapter has empiric
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ChaptersevenSummaries,conclusionand
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7.1.2 Chapter twoThis chapter provi
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(profit) with the borrower. Any dea
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countries, Zakat is paid by all tho
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Another advantage is the accumulati
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This survey reveals that almost 40
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of the total Zakat amount due. Over
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Most respondents prefer a partnersh
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measurement and disclosure of Zakat
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measurement be re-defined in such a
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" Non-monetary elements, which incl
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Table 7.1A sample of the recommende
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7.3.2.2 AllowancesThe treatment of
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Zakat at 1.5 percent of the base ra
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Traditionally, Zakat was paid to th
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eason why the survey study covered
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should be set up to at least discus
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BIBLIOGRAPHYAbbas, F. 1988. "Anivar
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Al-Shafi'i,al-Imam, 1987. al-Shafii
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Gambling T. and Abdel Karim, R. 199
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Kuran, T. 1992. The Economic system
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Taylor, T. W., and Evans, J. W. 198
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CARDIFF BUSINESS SCHOOLDirectorProf
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S2. If the answer to question 1 is
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2. To what extent do you agree or d
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i" iii. 5. ijp'ji ý)ij;; -iK.d. 9.
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cycL. oll o: ri >ý_='°9 tMýa5l1
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G, i7'1 °ßi1 5'° C, .. c ýSý y
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e:;.-. roUS pL Ll LLAI L; 111 CIA:
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" Royal Decrees and Orders "
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ZAKAT REGULATIONS (1)Article I: The
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7- For those who do not keep reliab
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No: 17/2/28/8799(»Date: 8/9/1370 H
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No. 1 7/2/28/577Date: 14/3/1376 H19
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Royal OrderTo: Mohammed Sorour -Riy
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No. 6115/1(1)Date: 5/1/1383 H.With
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'Zakat & Income Tax Department Bran
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Kingdom of Saudi Arabia.Ministry of
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Ministry of Finance & National Econ
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