What is the role of zakat?

Zakat is one of the five pillars of Islam[1] and can be understood as a form of religious duty, purifying one’s wealth and, at the same time, functioning as a means to redistribute wealth to those who are in need. In Arabic, Zakat means amongst others growth and purity (Dean and Khan, 1997).

What is zakat role in the social development of society?

Zakah provides the basis of Islamic social welfare and plays the role of solving dangerous problems such as poverty, unemployment, catastrophes, indebtedness and inequitable income distribution in a Muslim society, both at family, community and state levels.

How zakat institutions can help to overcome the problem of poverty in Malaysia?

An institutionalized zakat governed by the State is the economic vehicle to eradicate poverty by the redistribution of the wealth to the poor and needy. This system can function effectively to reduce the income gap between the poor and the rich.

Who should Zakat be given to?

To be eligible to receive zakat, the recipient must be poor and/or needy. A poor person is someone whose property, in excess of his basic requirements, does not reach the nisab threshold. The recipient must not belong to your immediate family; your spouse, children, parents and grandparents cannot receive your zakat.

What are the economic benefits of Zakat?

It can be an effective mechanism to achieve sustainable development through reducing social problems and boosting economic activities. As a religious fiscal tool, zakat leads to a distribution of income, and hence, it increases the consumption, investment and public spending, and thus the economic growth.

Can zakat alone mitigate poverty?

Thus, zakat cannot stand alone in alleviating poverty. Zakat should not be perceived as a corrective measure to reduce poverty, but as a positive measure, as zakat is obligatory for every Muslim.

How zakat help the society?

The Zakat system helps to make sure the society’s wealth circulation is in a fair and clean condition. Due to the wealth people must pay Zakat to the poor, the wealth will not become too rich whereas the poor will not become poorer. Zakat also allows an individual to purify and grow his wealth.

What are the economic benefits of zakat?

How does zakat fight poverty?

Thus Zakat plays very important role in distribution of wealth and ultimately in alleviation of poverty; the payment of Zakat narrows the wide gulf between the rich and the poor, the standard of living of the poor people begins to improve. This system provides economic security to the poor, the destitute and the needy.

How Zakat help the society?

How effective is zakat?

Results revealed that zakat distribution reduces poverty incidence, reduces the extent of poverty and lessens the severity of poverty. Further, the current zakat distribution in Kelantan only gives a small effect on increasing the income of the poor.