Income Zakat Collection Through Salary Deduction in Selangor. A Proposed Framework for Sustainability

Abstract

This study aims to improve the method of zakat collection through salary deduction by improving calculation in the salary system. Specifically, the objectives of this study are to increase zakat collection in the future in Selangor, to recommend suitable measures to develop income zakat calculation in the salary system and to suggest deduction of income zakat as of the deduction of LHDN income tax deduction (MTD or PCB) in the salary system. The aim of this study are, to increase income zakat collection, to calculate income zakat with accurate calculation for employees based on their eligibility in the salary system and to avoid a non-movement of zakat deduction in employees’ salaries in the coming years. To achieve this, auto calculation will be imposed by employer on employees for income zakat in the salary system before income tax deduction for organisations in Selangor. This study is significant since zakat is one the important elements in Islamic Social Finance that is very crucial to be explored and utilized for ummah betterment. Hence, for the significance of this study, it will be beneficial for the ummah, especially for zakat payer (muzakki) and zakat receiver (asnaf). The benefit is also for the Lembaga Zakat Selangor and to the future researchers on how to improve income zakat collection. This is by proposing a framework on how to maintain zakat sustainability in future by improving the collection method especially for income zakat and to ensure zakat collection is more than zakat distribution in the future in Selangor.