Moderating Role of Economic Development’s on Zakat Success Factors and Compliance: A Saudi Arabian Perspective

Abstract

The paper report a result of an investigation in the moderating influence of economic development on the relationship between zakat success factors and compliance to pay zakat, focusing on key factors such as zakat awareness, support for zakat practices, understanding zakat application, and willingness to implement zakat. Data from 250 respondents within the General Authority of Zakat and Tax (GAZT) in Saudi Arabia were collected using a quantitative approach using questionnaires. Analysis was conducted utilizing AMOS 20 and SPSS 20.1 software. The study reveals a positive direct effect of zakat success factors on compliance to pay zakat, with economic development playing a crucial moderating role. This underscores the significance of economic development in influencing the relationship between zakat awareness, support for zakat practices, and zakat compliance. The practical implications extend to zakat institutions, urging them to enhance strategies for transparency and compliance by securing additional resources for development and organizing educational initiatives to cultivate positive attitudes towards zakat. The research contributes uniquely to the literature by incorporating economic development as a mediator in the zakat success factors and compliance relationship, offering valuable insights for researchers, economists, and zakat institutions. The findings emphasize the multifaceted impact of zakat on economic structures, social transformation, poverty reduction, and inequality. Additionally, the study highlights zakat's role in achieving sustainable economic growth and reducing social issues, advocating for its integration as a financial system to address challenges in the Muslim world. Despite limitations in respondent selection and timeframe, the research opens avenues for future studies, suggesting a broader exploration of Zakat's impact on sustainable development, climate change, wealth distribution, and economic transformation.