Towards A Unified Zakat System

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government (strongly in favour), Islamic banks (in favour)and national banks (against), significant differences ofopinion were found when dealing with charitableorganisations. Although all countries are in favour, Bahrainis the most in agreement (mean = 4.0), Kuwait is the leastin agreement (mean = 3.36), while Saudi Arabia and the UAEare in the middle with means of 3.51 and 3.61 respectively.The chi-square is significant with a significance level of5.1 percent, which is close to the 5 percent level. It can,therefore, be said that the difference in means betweencountries regarding the attitude towards charitableorganisations is not due to chance but due to some otherfactors. So far Saudi Arabia and the UAE respondents havevery close means due to the homogeneity of the twocountries' populations. Both countries have a conservativepopulation with the vast majority being from the Sunni sect.Bahrain is the least conservative with 75 percent of thepopulation being from the Shiite sect. Kuwait is slightlymore conservative than Bahrain with a strong Shiiteminority.6.2.4 Who should distribute Zakat?As mentioned in the previous chapter, the Zakat base is 2.5percent of Muslims wealth. Due to a surplus of oil revenue(that reached its peak in the 1970s) the government used to219
collect and distribute only 1.25 percent. The other 1.25percent was left to Zakat payers to distribute, providedthat the Zakat payer provided documents to prove thepayment. This procedure was changed in 1984 when thegovernment decided to collect and distribute the entireamount (2.5 percent). It was, therefore, important to askthe respondents' opinion on who should distribute Zakat. Asummary of the respondents' opinion is presented in tables6.6(a) and 6.6 (b).The earlier analysis indicated that a significant proportionof respondents supported the proposal that Zakat should becollected by the Department of Zakat (government). Theranking of the means in these two tables is similar to thosein the previous two tables concerning the collection ofZakat.Table 6.6(a)Who should distribute Zakat?Zakat should be Freq. Mean Rank sub-group mean by occupation SD MIN MAX Chi-sq P. valuedistributed by AC GV INV AFGovernment 159 3.98 1 3.72 4.32 4.05 3.85 1.25 1 5 3.60. 307(Dept. of Zakat)Islamic banks 159 3.18 3 2.95 3.24 3.42 3.12 1.33 1 5 2.58. 460National banks 159 1.99 4 1.80 2.18 1.93 1.88. 983 1 5 5.14 . 162Charitable 159 3.70 2 3.54 3.76 3.66 3.85 1.21 1 5. 625 . 891organisationsAC= academics GV= governments INV= investors AF= accounting firmsIt can be seen from table 6.6(a) that a high proportion ofthe respondents supported the proposal that the Departmentof Zakat, with a mean of almost 4, is a suitable candidateto distribute Zakat. The respondents also recommendedcharitable organisations as candidates to distribute Zakat,220
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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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4.3.2.4 The passage of a yearThe pa
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oken bones, or gouged eyes (Joan, 1
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the total amount becomes due. The d
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example,today is the date that Zaka
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this item should be considered as p
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Prophet's obligations. The amount o
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4.4.4.2 Starting point of Zakat dut
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such as income earned from practisi
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There is a widely known view of Mal
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amount (2.5 percent). In Saudi Arab
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4.5.2 Department of General IncomeE
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He further describes some condition
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year. Zakat is payable on both the
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through proper channels of the Prop
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therefore, make a list of the avera
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unrealised profits should be net of
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Balance Sheet 31-12-19X230-12-XXX13
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literature behind the selection of
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Zakat system supposedly to be appli
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ChapterfiveResearchmethodology5.0 I
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5.2 Research questions5.2.1 Zakat p
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distribution to those deserving it
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egulation, 1988). Companies, using
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5.2.5 Zakat regulationRegulating Za
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capital owners (Article 70).The mea
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authorities and securities regulato
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5.2.8 Variations in accounting meas
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Page 191 and 192: then they must be discounted since
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Page 195 and 196: 5.2.10 Percentage of ZakatWhen Zaka
Page 197 and 198: 5.2.12 Zakat location in the annual
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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 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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Page 237 and 238: to the national banks where the mea
Page 239: difference in means is highly insig
Page 243 and 244: The ranking of institutions' means
Page 245 and 246: Firstly, occupation seems to affect
Page 247 and 248: It was, however, roughly find two f
Page 249 and 250: collection), as the chi-square stat
Page 251 and 252: financial statements such as profit
Page 253 and 254: like to be on the safe side as far
Page 255 and 256: It is uncontested that the degree o
Page 257 and 258: espondentsseem to share some doubt
Page 259 and 260: score to themselves on the suggesti
Page 261 and 262: statistics were not significant at
Page 263 and 264: Secondly, Gulf countries have not y
Page 265 and 266: Table 6.13(b)Reasons behind low lev
Page 267 and 268: Alms (Zakat) are for the poor, the
Page 269 and 270: Table 6.14(b) Appointment and pay f
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Page 275 and 276: 4.61. The opinion of accounting fir
Page 277 and 278: 6.5 SummaryThis chapter has empiric
Page 279 and 280: ChaptersevenSummaries,conclusionand
Page 281 and 282: 7.1.2 Chapter twoThis chapter provi
Page 283 and 284: (profit) with the borrower. Any dea
Page 285 and 286: countries, Zakat is paid by all tho
Page 287 and 288: Another advantage is the accumulati
Page 289 and 290: 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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