An Exploratory study of e-zakat usage among Malaysian Academician

Transcription

1 An Exploratory study of e-zakat usage among Malaysian Academician Rusli Abdul Roni Universiti Tenaga Nasional, College of Foundation and General Studies, Malaysia. Mahlindayu Tarmidi Universiti Tenaga Nasional, College of Business Management and Accounting, Malaysia. Abstract The aim of this study is to explore the awareness of Malaysian academician pertaining the existence and utilization of e-zakat, an online application for zakat payment and calculation by Pusat Zakat Selangor. Through the distribution of 500 sets of self-developed questionnaires, the study found that more than half of the respondents did not aware on the existence of the applications. Only very few of the zakat payer utilize the systems and most of them choose to utilize the direct deduction facilities from their monthly salary. This findings may contribute to the body of knowledge on the e-zakat studies. Apart of that, the findings also may be treated as a signal to the PZS on the user responds towards e-zakat application despite their effort and commitment in improving the zakat collection process. It also may serve as an input to the government in enhancing the zakat collection system in Malaysia. Key words: e-zakat, Pusat Zakat Selangor, Malaysia JEL Classification: C19, G13, G14 1

2 1. Introduction The forth pillars of Islam is Zakat, which is define by Zaim (1989) as a compulsory levy imposed on Muslim so as to take surplus money or wealth from the comparatively well-to-do members of the Muslim Society and give it to the destitute and needy. As it due from individual or businesses, it is a need to have a proper collection method and is kept full of integrity, accountability and courtesy (Zayas, 2003; Kaslam, 2007). The initiatives for proper zakat management was embarked back from the time of the second caliph after the death of prophet Muhammad (pbuh), Umar Al-Khattab whom also known as the Muslim World Transformer (Htay and Salman, 2014). He introduce new administration system including the tax system which eventually increase the country s income and improve its economy. The system has been well accepted and adapted through generations until today. Among others, Malaysia is one of the country which adapting the second khaliph s system. The zakat management is delegated under the jurisdiction of the state governments which are called as the State Islamic Religious Councils (SIRCs), which eventually is not under the federal government jurisdiction. Hence a different management and implementation of zakat may vary between different states depending on the governing law of each state. The traditional way of zakat collection was done through the payment over zakat counters in the zakat collection offices. However, the emergence of internet has changed the shape has led to the boom of Internet payment or also known as e-payment. According to the report, shopping or paying bills online ranked fourth among 10 specific Internet uses. From the Internet World Stat, in 2014 Malaysia is ranked in the 37th place in the world internet users list with 40.25% internet penetration of the total population. This is a good signal in respoding to the initiatives of the states in Malaysia on introduicing online zakat payment (also known as e-zakat) to the community. The aims are to provide better quality zakat service delivery to citizens in Malaysia and to improve the zakat system including: to simplify zakat service delivery; to eliminate the layers of zakat procedures and management practices; to enable the citizens, businesses, and other levels of government to find information and get service from zakat institution; to enable the achievement of the other elements of zakat organization Management Agenda; and streamline the zakat operations to guarantee rapid response to citizen needs. (Source: Kaslam, 2008) However, Agarwal and Prasad (1999) argued that systems that are not utilized do not result in expected efficiency and effectiveness gains. There are people may not accept the technology due to the feeling of fear, resist to change and do not view it as beneficial. It is difficult to overestimate the impact of technology on society and on individuals. Hence this study is aimed to gauge the awareness of e-zakat online system and to examine the extent of 2

3 utilization of e-zakat online among individual zakat payers. It is envisage that this research would provide the intellectual challenge and contribute to knowledge in this area of user perceptions of IT utilization, particularly for zakat payment, also to provide indispensable evidence on the necessity of improving the awareness and utilization of e-zakat online. The findings may serve as a reference to the regulatory body on the current state of e-zakat awareness and utilization despite the huge investment they had put in to get the system available. The next section of this paper will discuss on the review of zakat obligation and management and the development of information technology pertaining to zakat management. It is next followed by the methodology section and will be ended with the discussion of findings and conclusion section at the end of the paper. 2. Literature review Zakat is forth pillars of Islam and all Muslims are compulsory to follow as sign of obedient to the one God, Allah S.W.T. the requirement of zakat payment is clearly stated in the holy Quran; و أ ق يم وا الص ل ة و آت وا الز ك اة و ار ك ع وا م ع الر اك ع ي Translation: And perform As-Salat (Iqamat-as-Salat), and give Zakat, and Irka' (i.e. bow down or submit yourselves with obedience to Allah) along with Ar- Raki'un. (QS:1:43) In general, defined by Sayyid sabiq (1991), zakat is that portion of a man s wealth is designated for the poor. From economic point of view, based on the study of Lubis et al. (2011), theoretically zakat may improve the community wealth as is paid by the people who has surplus and will be distributed the those who are in need which are also asnaf. This is as stated in the Holy Quran; إ ن ا الص د ق ات ل ل ف ق ر اء و ال م س اك ي و ال ع ام ل ي ع ل ي ه ا و ال م ؤ ل ف ة ق ل وب ه م و ف الر ق اب و ال ار م ي و ف ي ا لل و اب ن الس ي ف ر يض ة م ن ا لل و ا لل ع ل يم ح ك يم Translation: As-Sadaqat (here it means Zakat) are only for the Fuqara' (poor), and Al-Masakin (the poor) and those employed to collect (the funds); and for to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allah's Cause (i.e. for Mujahidun - those fighting in the holy wars), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise. (QS:9:60) 3

4 Fundamentally, the objective of zakat is to achieve the socio-economic justice as it able to increase the consumption and purchasing power of the poor. Due to its importance, much research has been conducted on the zakat issues. Al-Qaradawi, a famous muslim contemporary intellectual. Islamic thinker and da i (missionaries) had done important wirtings pertaining zakah in his book with the title of Fiqh al Zakah, which had given significant impact on the contemporary fiqh (Mushfiqur Rahman, 2003). The book which initially based on his PhD thesis include comprehensive aspects of zakat inclusive its history, the comparison with other religion s charity system, items which are bound for zakat, the system to distribute the zakat collection and also the comparison with the tax system. The book clearly argued on the ability of zakat system in distributing the wealth from the rich to the poor. A study done by Kahf (1989) suggested that zakat is able to eliminate the poverty in the Muslim context. In the context of zakat management, Buang (2000) discussed the sources of zakat management which are from shariah and relevant fatwas. Another study was done by Lubis et al., (2011) which investigate the suitable system based on technology perspective to develop the effective and efficient zakat management process. The study on comparison of zakat and modern taxation was done by Bakar and Rahman (2007). Apart of that, Rahman (2007) also highlighted the pre-requisite in integrating the zakat concept in the modern financial system in Malaysia. Another area of zakat study are such as the need for transforming the zakat institution as a social institution in Malaysia (Kaslam, 2011), the future trend of zakat payment in the state of Melaka was done by (Md Razak et al. 2013) and best practices of financial information disclosure for zakat institutions (Htay & Salman 2014). The emergence of internet has enable online payment and online information distribution to be enjoyed by any user in the world. In Malaysia, this current trend has trigger the zakat institutions to deploy zakat online or known as e-zakat. The issue of e-zakat was first highlighted by Kaslam (2009). The his research, he discussed the advantages of e-zakat which not only enhance the user ability in calculating, communicating and checking the zakat issues with the zakat institution but also enhance the management of the zakat information, management and distribution process. The list of zakat institution and its webpages is stated in Table 1. Apart of that, pertaining to zakat online, another study Sulaiman & Jamil (2014) proposed an information security governance model for the management of zakat information and to reduce information asymmetry. Despite the discussion of advantages of technology to be incorporated in zakat management and collection, there is still lag of study which focusing on the utilization of the 4

5 e-zakat itself. As technology may only provide its advantages once it is utilized, hence this study is important to provide evidence on the current level of e-zakat utilization. 3. Methodology 3.1 Research question As mentioned in the objective, this study is to explore the current stage of awareness and utilization of e-zakat among the zakat payers. Hence, the research questions for this study are: payers? a). what is the level of e-zakat awareness among the zakat payers? b). what is the level of e-zakat utilization among the zakat payers? c). what are possible reason for any non-utilization of the e-zakat among the zakat 3.2 Research instrument In order to answer all the three research questions, a new questionnaire was developed which is divided into two sections. The first part is regarding the respondents demographic information and the second part is on the awareness and utilization of e-zakat. The respondents were also required to choose the reason if they did not use e-zakat. For this question, the respondents were allowed to choose more than one reason. 3.2 Sampling method The questionnaire was distributed to 500 academics comprising lecturers from both private and public universities in Selangor. The reason for choosing the state of Selangor is because, Selangor is the first state who introduce e-zakat since year Apart of that, Pusat Zakat Selangor, the state Zakat institution, has been reported among the highest zakat collector in Malaysia (Zaman & Wahid 2014). The academicians is selected to be the respondent for the survey is due to their daily task which highly involved with information and communication technology (ICT) usage. The current trend of academics and knowledge dissemination requires the academicians to be well exposed with ICT and utilize them for classes (Iahad et al. 2012). 5

6 Selangor Federal Territory Melaka Negeri Sembilan Johor Pahang Proceedings of the Fourth Asia-Pacific Conference on Global Business, Economics, Finance Table 1: Website and Portal Address of Zakat Organizations in Malaysia State Zakat Organization Website/Portal Terengganu Kelantan Perak Pulau Pinang Kedah Perlis Lembaga Zakat Selangor (LZS-MAIS) Pusat Pungutan Zakat (PPZ-MAIWP) Pusat Zakat Melaka (PZM) Pusat Zakat Negeri Sembilan (PZNS) Majlis Agama Islam Johor (MAIJ) Pusat Kutipan Zakat Pahang (PKZP) Majlis Agama Islam dan Adat Melayu Terengganu (MAIDAM) Majlis Agama Islam Kelantan Majlis Agama Islam dan Adat Melayu Perak Pusat Urus Zakat P.Pinang (PUZP) Jabatan Zakat Negeri Kedah Majlis Agama Islam Perlis Sabah Pusat Zakat Sabah Sarawak (Source: Kaslam, 2009) Tabung Baitulmal Sarawak (TBS) Hence, it is assumed that with the academic background and ICT exposure, the academicians will be the fine candidate to answer the survey. The questionnaire was sent via to 500 randomly selected potential respondents with the level of lecturer, senior lecturer, doctors, associate professors and professors from both private and public universities in Selangor to explain the purpose of the survey and to request 6

7 for their cooperation to participate. After two weeks a friendly reminder was sent again. The last reminder was sent a month after the first was sent to the potential respondent. 4. Results and Discussion 4.1 Response rate of survey The period of data collection was two months which was commenced in January 2015 and continued until the middle of Mac Overall 110 questionnaires out of 500 sets sent out were returned to the researchers. After eliminating the incomplete sets, only 106 are usable for further analysis. This represents a response rate equal to 21% of the participants, considered acceptable according to Sekaran (2003). Since the objective of this study is to explore the level of e-zakat awareness and utilization, the descriptive statistics, such as frequencies is adopted for data analysis. 4.2 Respondent Background The first part of the questionnaire contains questions pertaining the respondents demographic information. This includes their gender, age, marital status, salary, state of origin, current position, qualifications and work experience. More than half of the respondents are female (55.7%) which most of them age in the range of 36 to 45 years old (35.8%). 85% of them were married and currently received their salary at the range of RM4,000 to RM6,000. Most of the respondents were originated from the state of Selangor (25.5%) and lecturer is the majority of the respondent position (29.2%). Accordance to their qualification with doctor of philosophy (52.8%) they had working experience of more than ten years (66%). Table 2 below will further display the detail of respondents demographic information. 4.3 Descriptive analysis The second part of the questionnaires contains the main survey questions of the study which are the eligibility of the respondents to pay zakat and the e-zakat utilization. Out of 106 respondents, 99 respondents claim to be eligible for zakat payment and 86.8% of them are paying their zakat in Selangor. Since, the study focus on the usage of e-zakat system by Pusat Zakat Selangor, the further analysis on the e-zakat usage is focused on the 85 respondents only. Table 3 further display the detail information pertaining the zakat payment eligibility and state of payment. 7

8 Table 2: Respondents demographic information Item Frequency % Gender Male Female Age years years years > 55 years Status Single Married Divorced Salary ( RM) 2,001-4, , , ,001-10, > 10, Origin Selangor Perak Johor Kelantan Pahang Wilayah K.L Negeri Sembilan Terengganu Melaka Penang Kedah Level of position Assistant Lecturer Lecturer Senior Lecturer Associate professor Professor Total working experience < 5 years years > 10 years Academic Background Bachelor Master Doctorate The next section is to discuss the usage of e-zakat system for zakat payment among the zakat payers in the state of Selangor. Table 3 shows that out of 85 zakat payers, only 4 of them using the e-zakat system. The findings is alarming as the given advantages of technology and the objective of developing the e-zakat system, very few of the respondents are utilizing it. 8

9 Table 3: Eligibility and payment of zakat State of Payment Eligibility to pay Zakat Yes No Not sure Selangor Johor Kelantan Negeri Sembilan Sarawak Wilayah K.L Few reasons were suggested to explain the reason for not utilizing the systems, payment of zakat through salary deduction is seen to be the highest score for the reasoning (with more than 50%). The next reason is the payment of zakat is paid directly through zakat counters (45.9%). Surprisingly, more than 30% claims that they are unaware of the availability of the system. Hence, this may call for more promotion and activities by the zakat institutions to communicate and promote the existence of such system which is aimed to provide better services and information. The survey result also shows an interesting findings on the payment of zakat. 20% of the payers choose to pay the zakat amount directly to the asnaf. The detail of given reasons by the payers is displayed in table 4. Table 4: Reasons for not utilizing e-zakat No Reasons Frequency Percent 1 Payment of zakat is done through salary deduction Payment through zakat counter Unaware of e-zakat Payment is made directly to asnaf Payment via Islamic banking Payment through Internet Banking Payment via post office Zakat counter in campus Payment via SMS Payment via ATM Conclusion The objective of this study is to explore the current level of e-zakat awareness and utilization by the zakat payers especially in the state of Selangor. Through the distribution questionnaires via to academicians in the private and public universities in Selangor, the findings shows that 29% of the zakat payers in Selangor still not aware of the e-zakat system although the system has been deployed since Apart of that, only very few of the respondents used the e-zakat system for their zakat payment. Most of the respondents prefer the manual and traditional way of zakat payment which is over the zakat counters and much easier way by means of salary deduction. 9

10 This findings may trigger a red flag to the regulatory body pertaining their effort in promoting for online zakat payment and website utilization. As discussed by Agarwal and Prasad (1999), technology need to be utilized in order to enjoy the benefits. Although the respondent of this study is among academicians which were assumed to have high engagement with technology, the findings shows more effort need to be taken to motivate the zakat payers to involve and utilize the e-zakat system in order to achieve all the objectives set. This study only focus on the e-zakat usage among the zakat payers in the state of Selangor. It is suggested that future research may look at a wider scope which cover the whole country of Malaysia and may perform a comparative study of e-zakat utilization between states. Apart of that, the respondents of the study were only the academicians in the public and private universities in Selangor. Future research is encourage to include multiple discipline and background of respondents which may further explain the variations of the situations. As this study is only descriptive in nature, future study should also consider to test the correlation of possible determinants with the degree of e-zakat utilization to gain more understanding of the situation. Finally, this study only relies on a single research method, which is through the distribution of questionnaires. Although this approach may be sufficient to achieve the objectives of this research, employing various methods would enrich the findings and alleviate the possibilities of bias. References Agarwal, R. and Prasad, J., Are individual differences germane to the acceptance of new technologies? Decision Sciences, Vol. 30(2), 1999, Al-Qaradawi. (1994) Fiqh al-zakat. Kaherah: Maktabah Wahbah Bakar, N.B.A. and A.R.A. Rahman, AbComparative Study of Zakah and Modern Taxation, J. KAU: Islamic Economics, 20: Buang, A.H., Pengurusan Zakat: Satu Analisis dari Perspektif al-quran dan al-sunnah ( Management of zakat: an analysis from the perspective of Al-Quran and As-Sunnah ), Jurnal Syariah, 8: Htay, N.N.S. & Salman, S.A., Proposed Best Practices of Financial Information Disclosure for Zakat Institutions : A Case Study of Malaysia. World Appied Science Journal, 30(37), pp Iahad, A., Zairah, N. & Rahim, A., The Impact of UTAUT Model and ICT Theoretical Framework on University Academic Staff : Focus on., 2(2), pp Kahf, M., Zakat: unresolved issues in the contemporary fiqh, IIUM Journal of Economics and Management, 2: 1-22 Kaslam, S., The advancement of e-zakat for delivering better quality service and enhancing governance sphere of zakat institution in Malaysia, in World Zakat Forum. 10

11 Kaslam, S., Governing Zakat as a Social Institution: The Malaysian Perspective, International Journal of Governance, 1: Lubis, M. et al., Enhancement of Zakat Distribution Management System : Case Study in Malaysia. International Management Conference 2011 Proceedings, pp Available at: Md Razak, M.I. et al., Overview of Zakat Collection in Malaysia : Regional Analysis. American International Journal of Contemporary Research, 3(8), pp Mushfiqur Rahman (2003). Zakat Calculation. United Kingdom: The Islamic Foundation. Sulaiman, H. & Jamil, N., Information Security Governance model to enhance zakat information management in Malaysian Zakat Institutions. In International Conference on Information Technology and Multimedia (ICIMU). pp Zaman, N. & Wahid, H., Pewartaan Zakat Pendapatan : Kajian di Malaysia Trend Kutipan Zakat. In PERKEM. pp Zayas, F. G. 2003, The Law and Institution of Zakat, Kuala Lumpur: The Other Press 11