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The Effectiveness of Zakat in Reducing Poverty Incident: An Analysis in Kelantan, Malaysia.
By:
Ahmad Fahme Mohd Ali1, Zakariah Abd. Rashid2, Fuadah Johari1 & Muhammad Ridhwan Ab. Aziz1
Zakat and Poverty Alleviation
Zakat is one of the five fundamental obligations of Islam. It is an obligatory form of worship (Ibadah) prescribed by Allah s.w.t. Allah commanded in the Qur’an:
“… so establish Salat and give Zakat, and hold fast to Allah …” (Al-Qur’an 22:78)
The institutions of zakat are among several instruments instituted by Islam to combat and enhance welfare in the society. Zakat helps generate a flow of funds and at the same time increase the consumption of the poor and needy. The word zakat means growth, cleanness and purity in Arabic (Ibn Faris, 1998). The Qur’an mentions the word zakat 30 times and at three places it appears as being commanded by God (Allah s.w.t). Zakat is often called sadaqah in the Qur’an. The importance of zakat as an obligation on Muslims is also emphasized in many sayings of the Prophet Muhammad (pbuh). The importance of zakat may be established from a saying of the
Prophet (pbuh) in which he indicates that refusing to pay it signify a rebellion against the Islamic State (Mujahid,2007). Hence, zakat can be considered as an essential form of worship and spiritual purification.
In Kelantan, the collection of zakat is increasing from time to time. Thus, in this case, the opportunity of zakat as a method in reducing poverty is high. Zakat funds could be used to create a pull of funds which can be used in financing development activities which in future can replace government expenditures. For example from the year 2000 until 2013, zakat collection has increase from MYR 15.65 million to MYR 40.62 millions. This has shown on how much does zakat funds will creates more chances in reducing and eliminating the poverty in Kelantan.
You may want to look at my paper on "An In- Kind Tax on Live Stock And Agricultural Products..." where I discuss some aspects of the economics of Zakat. It is available on Research Gate site. Best of Luck
Zakat should be analyzed as important element in national social protection systems in the countries in questions. It supplements public social protection may substitute it if public systems are deficient. But at the same time its social and economic effects and impacts, including impacts on poverty reduction should be regularly monitored by the society and recommendations how to make it function better developed.