Analysing Trends In Zakat Collection And Distribution Across Advanced And Less Advanced States In Malaysia

Abstract

Zakat, a fundamental pillar of Islamic finance, plays a crucial role in addressing income inequality and poverty alleviation. Each state in Malaysia manages its zakat institutions. Some of the states are categorized as advanced states, while other groups of states are less advanced. Certain states have significantly higher collection amounts than others. Drawing on the Resource-Based View (RBV), this paper emphasizes how internal resources and capabilities within zakat institutions can influence performance outcomes in both zakat collection and distribution. This paper provides a review of the scientific method to assess the performance of zakat collections and distributions, highlighting both its successes and challenges. The study found that the zakat collection amount generally increased year after year. However, not all states in the study showed an increased trend in the zakat distribution amount. The study also revealed that there was no difference in the zakat distribution between advanced and less advanced states. However, there is still room for improvement in terms of transparency, collaboration with other agencies, and the inclusion of additional items in the distribution process to better serve the needs of the target population.