Zakat and waqf as instrument of Islamic wealth in poverty alleviation and redistribution

Abstract

PurposeZakat has a strong humanitarian and social-political value. Zakat occupies a central role in Islamic fiscal policy and operations. At the same time, it does not preclude the use of modern tools and techniques in raising the state revenues. Islam provides its own comprehensive approach how the state can raise its revenue and how the revenue should be spend. Zakat is collected from those who are qualified and distributed to the eight recipients as identified in the Quran. Waqf instrument plays an important role in Muslim societies as its support the aged, the poor, the orphans through provision of education, training and business activities. The creation of waqf is strongly advocated, especially the creation of cash waqf in view of the expensiveness of land as waqf. There are collaboration efforts for cash waqf and zakat collection being done through Islamic banks and takaful. The paper aims to discuss these issues.Design/methodology/approachThe data were source from the inland revenue, government agencies and state religious authorities, interviews, articles and conference reviews, as well as economic reports and later transcribe into charts and figures.FindingsIts shows the efficiency of wealth distribution according to the Islamic principles and application of the financial inclusion in the Islamic society.Research limitations/implicationsThe limitation is in verifying the accuracy of data gathering from the government agencies.Social implicationsThe study can be used in financial inclusion through the application of zakah and waqf being applied to alleviate poverty.Originality/valueThe research is an extended work done on zakah and waqf in Islamic wealth distribution.

Development Strategy of Islamic Boarding Schools-based Waqf (Case Study: Islamic Boarding Schools of Daarut Tauhiid, Bandung)

“…On the other hand, commercial competence is very important to reach the purpose of Waqf institutions to make Waqf assets productive in relation with the productivity of Waqf assets which is finally expected to increase wealth for all Muslims and people generally. This is in line with Razak (2019) that Waqf has a role in increasing, preserving and generating wealth by utilizing Waqf assets to earn more income, which is beneficial for the development of Islam and the entire Ummah. In addition, Suhaimi and Suhaimi (2020) explained that Waqf also has a position in economics when all sources and Waqf assets can be used for the benefits of society.…”

A Techno-Efficiency Analysis of Zakat Institutions in Indonesia

“…Furthermore, Nurzaman (2017) found that productive zakat that is distributed increases the mustahiq welfare index both in material and spiritual terms. Other research such as those conducted by Sari et al (2019) and Razak (2020) also show the same result. However, Afriadi and Sanrego (2016) found that overlapping distribution with government programs is one of the priority problems of the Zakat Institution, making distribution less effective and efficient.…”

Equity-based Islamic crowdfunding in Malaysia: a potential application for mudharabah

“…As the guidelines recommend, a company may increase a maximum of MYR3m in a year irrespective of the number of ventures and a total of MYR5m on the equity platform (SCM, 2015). This is a good prospect for energetic investors to embark upon sustainable business ventures (Razak, 2020). As for Islamic equity crowdfunding, while currently there is only one registered Islamic equity crowdfunding platform, many other platforms also offer Islamic practices without registering their company as Islamic.…”