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JIABR
14,8 Zakat administration reformation
towards an effective and efficient
zakat revenue generation
1232 Ram Al Jaffri Saad, Aidi Ahmi, Norfaiezah Sawandi and
Norazita Marina Abdul Aziz
Received 28 May 2021
Revised 29 November 2021 Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia,
4 February 2022 Sintok, Malaysia
2 July 2022
2 November 2022
Accepted 20 December 2022

Abstract
Purpose – This study aims to identify the inputs from zakat administrators and experts needed for more
efficient and effective zakat revenue generation.
Design/methodology/approach – Face-to-face interviews with zakat executives, administrators and
experts are conducted to collect data.
Findings – The findings show three components of input required in the zakat transformation:
environment, resources and history. The environmental component comprises five sub-components:
companies, banks, zakat recipients, individual zakat payers and the legislative, while the resource sub-
components comprise tangible and intangible resources. For history, two components, namely, achievements
and challenges, need to be taken into account by the zakat administration.
Research limitations/implications – This study’s main implication is that the components proposed
in this study can serve as the basis for developing new strategies for improving zakat collection and
distribution management to achieve a more efficient and effective level.
Practical implications – This study will be helpful for policymakers, especially zakat authorities, on how
to enhance their administration.
Originality/value – The model developed in this study will help the zakat administration to reform and
enhance zakat compliance and zakat revenue generation.
Keywords Islamic economics, Zakat institution, Reformation, Model, Compliance,
Revenue generation
Paper type Research paper

1. Introduction
Lower zakat revenue generation and ineffective zakat distribution have affected the Muslim
community and the country’s economy. Malaysia, the country given a special focus in this
study, is an example of an Islamic country that had made a lot of effort to increase the
collection and distribution of zakat but still showed a low level of achievement. For example,
the percentage of the total zakat revenue collection is only 1% compared to the total tax
revenue in Malaysia. The zakat report showed that the zakat collection for 2016 is only 3%
of the government revenue (Department of Awqaf, Zakat and Hajj [JAWHAR], 2021a).

Journal of Islamic Accounting and

Business Research This research was supported by the Lembaga Zakat Negeri Kedah (LZNK) through Zakat Research
Vol. 14 No. 8, 2023
pp. 1232-1260 and Innovation Institute (IPIZ) Universiti Utara Malaysia Grant Scheme (SO Code: 14119). The
© Emerald Publishing Limited authors also thank those who have contributed to the successful completion of this project.
1759-0817
DOI 10.1108/JIABR-05-2021-0151 Disclosure statement: The authors reported no potential conflict of interest.
 The respective states administer zakat in Malaysia as part of the State Islamic Religious Zakat revenue
Council (SIRC) administration. Zakat law is governed by each state’s enactment or zakat generation
law. Zakat collection and distribution are handled solely by SIRCs, which are responsible for
all aspects of zakat management. Even though each state has its SIRC, they are all called
“zakat institutions” in Malaysia. The goal of zakat is the same regardless of the method used
to administer it in different countries.
Zakat administrations are currently considered ineffective because the actual amount of
zakat collection and the actual amount of existing zakat payers are still far lower than the 1233
potential amount of the zakat collection and the potential number of zakat payers. Similarly,
the surplus of zakat funds not distributed to eligible recipients has been debated among the
public, academics and zakat institutions. This issue has become one of the significant problems
as it keeps recurring each year. Zakat collection and distribution reports in Malaysia from 2018
to 2020 show that zakat distribution performance is ineffective (Department of Awqaf, Zakat
and Hajj [JAWHAR], 2021a, 2021b). For 2018, the amount of zakat collection across the country
is RM2.9bn. This number increased to RM3.3bn in 2019 but decreased to RM2.6bn in 2020. Of
this amount, the number of funds distributed yields inconsistent with the amount collected. For
example, in 2018, only RM2.8bn was allocated, leaving a sum of RM100m that was not
distributed. The total amount of undistributed zakat funds increased significantly in 2019
when there was a surplus of funds of approximately RM300m. For the year 2020, a total of
RM600m undistributed zakat funds.
In some ways, these facts show that the relationship or link between zakat administration
reform, bringing in more money and giving out money effectively and efficiently is an
important area of research that the government needs to pay close attention to. Previous
research on zakat has focused on two main trends, and those studies have some gaps. Firstly,
these studies focus more on how people pay zakat and how it is distributed. For example,
Oktavendi and Mu’ammal (2022) looked at how Generation Z pays zakat, infaq and sadaqah
through digital payments or zakat information systems. Other studies, like those by Abdul-
Jabbar and Bin-Nashwan (2022), Sadallah and Abdul-Jabbar in 2022 and Siswantoro et al. in
2022, looked at how trust, psychology and tax rebates affect people and business owners’
decisions to pay zakat. Ashurov et al. (2022) and Younas et al. (2021) also suggest a new way to
measure the operational efficiency of zakat institutions in terms of zakat collection,
transparency and effective distribution, which will help zakat recipients have better lives.
Secondly, the models used in earlier studies led to psychological models like the theory of
planned behaviour that help us figure out how people act when it comes to zakat. This is clear
when studies like Andam and Osman (2019), Asmalia and Kasri (2019), Bin-Nashwan et al.
(2021), Salleh et al. (2021) and Kasri and Yuniar (2021) use psychological theories to try to figure
out how people behave when it comes to paying zakat. Even though these theories might
explain this behaviour, they should not be the only way to look at the role of zakat institutions
in the bigger picture. Thirdly, most of the past studies have used quantitative methods, such as
sending out questionnaires, to collect data. For example, Salleh et al. (2021) used a survey
questionnaire to study how service quality, customer knowledge and Shariah compliance affect
customer satisfaction towards paying zakat through credit cards. Similarly, Andam and
Osman (2019) used questionnaires to determine what makes Muslim Filipinos more or less
likely to give zakat on employment income.
Thus, this study fills the gap in the previous studies. Firstly, this study focuses on a new
issue of income generation by zakat institutions in the future. This income generation is
significant because it determines the sustainability of zakat institutions. Suppose the zakat
institution can generate more funds, especially as a result of the payment of zakat by the
zakat payer, the sustainability of the zakat fund can be continued, and more zakat recipients
JIABR will receive the benefit and vice versa. While this issue is important, surprisingly, it has been
14,8 neglected in previous studies. Secondly, this study uses a new model that is the congruence
model. This popular model has been used extensively in the field of taxation, where its
environment is not much different from zakat. This new model is found to be able to explain
the transformation process that has been successfully implemented in the field of taxation.
Therefore, the same result is also expected in the field of zakat. Finally, this study uses a
1234 case study approach in the data collection process, and this is a method that is often
neglected in studies related to zakat. Therefore, the present study makes an effort to
examine how efficient and effective zakat administration can be in generating higher zakat
revenue and making sure of its effectiveness in zakat distribution in Malaysia.

2. Literature review
The issue of zakat administration reforms and revenue has become a concern among
researchers for many years. It was discussed that there is a need for the zakat institution to
reform its current administration to generate more revenue. This section presents relevant
literature related to the study. Specifically, the section discusses the concept of revenue
generation and an overview of zakat and distribution, after which a literature review on
previous zakat and tax administration reform is presented.

2.1 Concept of revenue generation

Several definitions have been found in the literature on revenue generation. Most of them are
located in the tax environment. The discussion in the context of zakat is still lacking. According
to Enahoro and Olabisi (2012), revenue generation was defined as the ways the government
raises funds to meet capital and recurrent expenditure. In the context of government, there are
three primary sources for them to raise funds. The first is income from tax, the second is non-
tax sources and the third is capital receipts. Tax sources comprise the government’s revenue
from all variable components of tax in a country (Okafor, 2012; Egbunike et al., 2018; Martinez,
2019; Sharma, 2019; Kleven et al., 2020; Saez and Zucman, 2020; Clemens and Veuger, 2020).
Meanwhile, non-tax sources are cross-country aid or aid from one tier of government to
another within a country. On the other hand, capital receipts include all the government’s
revenue from investments in other countries or within the country. Among these three
sources, income from tax is the most important because the level of government expenditure
depends on the tax administration’s ability and efficiency to generate adequate revenue
from taxation (Bird and Jantscher, 1992; Ahmad, 2018; Arif and Rawat, 2018; Wadesango
et al., 2018; Prichard et al., 2019; Aboagye and Hillbom, 2020; Sebele-Mpofu, 2020).
In the context of zakat, revenue generation can be defined as the processes or ways
through which zakat institution raises its collection to distribute funds to the asnaf. There
are two main sources by which zakat institutions can raise funds. These are from the zakat
collection, and the other is from other income. Zakat sources comprise the zakat institution’s
revenue from all the available components of zakat in a country. These include a variety of
zakat categories, such as zakat on employment income, zakat on business wealth, zakat on
gold and zakat on silver. On the other hand, other income sources include all the zakat
institution’s revenue, such as investment and rental. According to the Quran, the gathered
revenue will be distributed to the asnaf, which comprises eight groups: the destitute, the
needy, the fund administrators, the sympathisers, those in bondage, those in debt, those in
God’s cause and the wayfarer (At-Taubah, verses 60).
Zakat collection is one and the most vital sources of zakat institution revenue generation.
One of the factors determining an institution’s capacity to generate adequate revenue to
distribute to the asnaf is zakat administration efficiency and effectiveness. In the context of
tax, Bird (2015), Azubike (2009), Arif and Rawat (2018) and Sebele-Mpofu (2020) stated that Zakat revenue
efficient tax administration is the most vital instrument that can help the government to raise generation
tax revenue. However, when tax administration performs below the expected level, such as
inefficient and ineffective, it may be difficult for a country to benefit from the said advantages
of a system unless reform is made. The same case is for zakat. Reform is needed if the zakat
institution wants to increase its collection and distribution efficiency and effectiveness.
Therefore, this study highlighted zakat collection and distribution as the most viable and
significant zakat revenue activity source. 1235
Moreover, the literature shows that due to the numerous advantages of the tax sources of
government revenue, various countries across the globe embarked on tax administration
reform to make their tax system more efficient and effective in generating more revenue.
Thus, in the same vein, this study tries to adopt the same methodology used in the tax
administration reform to see whether it suits the zakat environment or not.

2.2 Zakat as instrument of welfare economic

As Islam promotes socio-economic justice, sharing resources between the rich and the poor
is emphasised through several means, including zakat (Zauro et al., 2020). Al-Latif Masyhur
(2002) and Hudaefi et al. (2022) mentioned that zakat is special because of the gentleness of
its collection. It was taken from the muzakki’s surplus property (out of necessity) and was
not supposed to be a burden for them. Consequently, the zakat distribution function is
important to consider all the good welfare shown to the mustahik (Saputro and Sidiq, 2020).
For instance, zakat productive helps the mustahik become an entrepreneur, which is a
proactive effort to pull the mustahik out of poverty and become those who contribute to the
country’s economic development. Table 1 lists the types of activities or aid provided by
zakat institutions for the welfare of eight kinds of mustahik.
Zakat institutions have been mandated to look after the community’s welfare through
appropriate zakat collection and distribution. Therefore, the zakat institution’s task is to
earn the trust of muzakki to continue paying zakat to them to improve their collection. Thus,
more significant funds can be distributed (Annuar et al., 2019). In a broader sense, it is of the
utmost importance to work on making zakat institutions more open and accountable as part
of a campaign to convince the public (Sawandi et al., 2020; Annuar et al., 2019). There are a
lot of worries about how badly zakat institutions are run and how well they reach their
goals, which affects how much trust muzakki has in zakat institutions (Annuar et al., 2019;
Sawandi et al., 2019). In a survey by Wahid et al. (2009), most respondents (36.7%) said they
were unhappy with how the zakat institution works. Among the reason given was the zakat
distribution is unclear, followed by incomplete distribution information as a whole (32%),
zakat distribution is not complete by the type of mustahik (19.7%), the total amount of
money distributed is not enough (6.4%) and then other problems (5%).
Sawandi et al. (2020) argue that muzakki are stakeholders in the zakat system, so their
well-being should be a top priority. As shown in Table 1, the zakat institutions have
undertaken various zakat distribution activities and considered the eight types of mustahik.
However, zakat institutions must take proactive measures if there is still discontent among
community members. Salleh et al. (2021) found that the satisfaction of zakat payers is highly
dependent on factors such as service quality, customer knowledge and Shariah compliance.
Wahid et al. (2009) found that it is likely that the muzakki are less exposed to how their zakat
funds are distributed. Thus, this will contribute to their dissatisfaction with the zakat
institution.
Steps should have been taken to spread information about the zakat distribution
activities to inform the community about them (Annuar et al., 2019). Also, institutions that
JIABR
Type of
14,8 Mustahik Activity and aid

Poor  Eid token  Construction of  Mustahik project

 Management of individual houses  The monthly food aid
nursing homes  House rental support  Courses/training
1236  Construction of  Emergency/petty cash  School fees aid – primary and
clustered assistance secondary schools
houses  Monthly financial  Educational needs support
 Medical assistance
assistance  Install plumbing and
 Funeral wiring houses
management
 House repair

Needy  Eid token  Emergency/petty cash  Trust fund for needy (group capital)
 Construction of assistance  The monthly food aid
clustered  Monthly financial  Courses/training
houses assistance
 School fees aid – primary and
 Eid token for  Takaful contribution secondary schools
needy orphans  Funeral management  Educational needs support
 Sewing  Install plumbing and  Scholarship
workshop wiring houses
management  Support for agricultural investment
 Business capital
 Medical support
assistance
 Support for the
 Construction of fisheries capital
individual
 Support for farming
houses
capital
 House repair
 House rental
support

Amil  Amil of zakat  Amil of zakat fitr  Amil institution management

institution

Mualaf  Eid token  Circumcision aid  Missionary unit staffs allowance

(Convert)  Construction of  Wedding aid  Capital assistance
clustered  Construction of  Courses/Training
houses individual houses  Academic trip
 Printing and  House repair  Allowance for basic religious classes
publishing
 House rental support 
 Talk program Allowance for basic religious
 Funeral management classroom teachers
 Contribution to
 Monthly financial  Support for education
body/
association of assistance  Sponsorship
Table 1. mualaf  Token of
Type of activities encouragement
and aid given to
(continued)
Mustahik
 Zakat revenue
Type of
Mustahik Activity and aid generation
 Emergency/  Missionary unit
petty cash management aid
assistance

Al-Riqab  Faith  Akhlaq reformation 1237

restoration assistance
assistance

Al-  Loans for life  Debt for community  Debt due to treatment or dialysis
Gharimin necessities benefit machine donation
 Medical debt  Funeral management
(without heirs)

Fisabilillah  Allowance for  Allowance for KAFA  Carpet/mosque equipment support

religious teachers  Support for school needs
teacher/speaker  Monthly allowance  Higher education institutions
 Forum for mosque officials
 The construction/refurbishment of the
program/  Remuneration for
religious talk mosque/school
assistant registrar of
  Sponsorship for huffaz, excellent
Assistance to marriage
Muslim students, SMART students, whether
 Token for
associations/ studying local or abroad
enforcement
bodies  Support for education
counsellor
 Course for   Construction/reformation of local
Token for volunteer
mosque officials counsellors religious institutions
 Support for  Emergency
research/ assistance, flood,
publishing storm, fire aid
 Good values  Construction/
integration reformation of abroad
Program religious institutions
 Outreach program

Ibnu Sabil Support for  Two-ways ticket  Support for students studying abroad
wayfarer support

Source: Abdul Hamid (2012) and Department of Awqaf, Zakat and Hajj [JAWHAR] (2021a) Table 1.

give out zakat should regularly improve their facilities. Every state should extensively use
innovative and creative technologies to assist zakat organisations in providing information
as promptly and correctly as possible to preserve the welfare of muzakki (Wahab and
Borhan, 2014; Zainal et al., 2016; Salleh et al. (2021). Muzakki’s satisfaction is crucial in
increasing the zakat collection each year and so boosting the mustahik’s well-being.
2.3.1 Congruence model. The model was first introduced by Nadler and Tushman (1980).
Initially, the model was created specifically for organisational behaviour by focusing on
public sector organisations. According to Nadler and Tushman (1980), this model can
determine three things related to an organisation, namely, determining whether an
JIABR organisation’s performance is at its best or not; ascertaining what can be changed to
14,8 improve an organisation’s performance; and modifying the corporate structure and common
organisational culture. This model is a tool that can guide the problem in a team or
organisation and then come up with a solution to the problem. It tells organisations about
the main causes or drivers of performance and the relationship between them (Nadler and
Tushman, 1980).
1238 The model was modified and adapted by Gill (2003) to be applied in the transformation of
tax administration. According to Gill (2000), the performance of revenue management
agencies (such as tax administration) in many countries depends on input, process and
output (see Figure 1). He further stated that the inefficient tax collection process was the
main cause of low tax collection. This argument has been supported by several other
authors, such as Bird (2004) and Manasan (2003). The same case also occurs in the zakat
environment, where Saad and Al Foori (2020) found that the problem of inefficiency of zakat
management is because of low zakat collection. This low collection is due to the reluctance of
zakat payers to pay zakat to zakat institutions. Thus, this model will be used in the zakat
environment because it is a tool that can guide a zakat institution to identify problems and
then develop solutions to that problems.
Generally, a budget deficit will occur if the tax revenue is insufficient to cover
government spending. Fortunately, this deficit will cause the government to finance it
with loans or financial connections, leading to rising public debt and inflation rates.
This creates a bad environment for governments to efficiently and effectively
implement and develop programs and policies (Martinez-Vazquez and Alm, 2003).
Consequently, the rise and fall in unexpected revenue collection have led to budget
cuts and a severe crisis in public spending management (Thrisk, 1977). This indicates
the need for tax administration to generate sufficient income for the government to
fulfil its mandate.
In the context of zakat, its primary goal is to achieve social and economic equality. In
terms of zakat’s economic implications, the goal is to positively impact a variety of
variables, such as total consumption, savings and investment, total labour and capital
supply, poverty eradication and overall economic development. This means that a high
zakat collection will help the zakat institution achieve its goals, and vice versa if it is low.
The amount of zakat collected in Malaysia is currently at a low level. As a result, more
significant efforts should be made to increase this collection and ensure the zakat fund’s
sustainability.

Figure 1.
Congruence model
Figure 1 shows this model has three main elements: input, transformation process and Zakat revenue
output. Input is necessary to run a tax administration operation effectively and efficiently. generation
Gill (2003) explains that for tax administration to generate sufficient income and ensure
compliance, there must be three inputs: environment, resources and history.
The environment includes various external stakeholders, circumstances and forces
affecting tax administration (Gill, 2003). The agency’s success or failure in managing the
country’s income depends mainly on how the tax administration handles the environmental
issues that stakeholders wisely offer. Gill (2003) says that the final solution to the low efficiency
1239
and effectiveness problems that most income-generating agencies face is to think strategically
outside the boundaries of tax administration without ignoring other stakeholders. So, figuring
out how important each environmental factor is improves the efficiency and effectiveness of
revenue management, which in turn increases revenue generation.
Next, the second factor is the resources that each tax administration needs to ensure it
can function effectively. According to Gill (2000), these sources can be divided into two,
namely, tangible and non-tangible sources. Gill (2000) further states in each resource
category, and there are three issues to consider:
(1) the aggregate level or the number of resources available;
(2) the quality of available resources; and
(3) the strength and flexibility of tax administrators to the use of available resources.

The last factor is history, which should be part of the input required for tax implementation.
This is because there is an expectation among taxpayers that, historically, they will be spared
any punishment even if they run away from paying taxes. This can lead to the failure of the tax
administration. In addition, court decisions may make it difficult for administrators to manage
tax law effectively.
Three inputs, namely, the environment, resources and history, are critical for the zakat
administration to generate sufficient funds. Zakat administration should pay attention to external
stakeholders and the circumstances and powers that influence zakat administration. To that end,
the zakat administration should be more strategic and think beyond existing boundaries to solve
the problem of efficiency and effectiveness while not neglecting existing stakeholders. As a result
of assessing the significance of each environmental factor, revenue management will become
more efficient and effective, resulting in increased revenue generation.
Following that, the administration of zakat must consider resource input, as it is required by
every institution to ensure that it can function effectively. Without tangible and intangible
resources, zakat institutions are perceived as unable to carry out their responsibilities effectively,
and the zakat objectives are not met. The final factor is history, which should be included in the
input required for zakat implementation. This is due to the historical expectation among zakat
payers that they will escape any punishment even if they avoid paying zakat. This can result in
the zakat administration failing to function correctly. Furthermore, the lack of enforcement of
zakat laws may make it difficult for administrators to manage zakat effectively.
The second part of the congruent model is the process of change. The tax office changes
the available inputs into outputs (Gill, 2000). For this step to work, the tasks, employees and
formal and informal settings must all fit together. Duties are an organisation’s precise
actions and activities to accomplish its goals. The employees’ knowledge, expertise and
skills will determine how well they achieve these jobs. An informal context is characterised
by customs and practices that are not governed by official rules or regulations. On the other
hand, formal settings relate to a framework for tax administration that includes rules,
functions and structures (Gill, 2003).
JIABR The last component of this model is output. According to Gill (2000), tax administration
14,8 produces certain organisational, unit and individual outputs. Gill (2000) further states that the
outputs from the inputs and processes of transformation for a revenue management organisation
are tax collected, tax declaration processed, arrears collected and orders that maximise tax
liability and penalties. Individual output means employees’ contribution towards achieving their
organisational goals over time. Gill (2000) argues that tax administration should apply the core
1240 principles of a function-based organisation where employee work is organised according to a
logical grouping of core functions that incorporate various taxation and responsible tax
administration types. Whereas for unit output, it is the contribution of personnel that generally
defines the overall achievement of a revenue administration over a given period (Gill, 2000).
Furthermore, Gill (2003) argues that congressional models can be considered comprehensive and
offered to diagnose the causes of tax revenue weaknesses and strengths.

2.4 Tax and zakat administration

Even though they are different in some ways, tax and zakat administration are similar in
that they both use procedures to guide management and give operational leadership to
entities (Mansor et al., 2019). Furthermore, by assisting those who are less fortunate or in
need, the tax and zakat administration reduces social disparities and resolves societal issues
(such as natural disasters induced by climate change) (Saad and Al Foori, 2020). Effective
tax administration helps reduce social inequality because the government helps people with
social and financial problems by giving them social security benefits from the public fund
(Mansor et al., 2019). The government helps people temporarily have trouble because of
natural disasters and economic, social or political changes (Pahala, 2016).
Secondly, a sound administration system facilitates the administration and monitoring of tax
and zakat that enable the flow of funds in society, which affects the economic process (Mansor
et al., 2019). The tax administration places considerable emphasis on supporting socio-economic
actions, demographic trends and the direction of operations done by public authorities to reconcile
public interest (Saad and Al Foori, 2020). An effective tax administration differentiates income tax
rates and economic incentives to expand government leverage and promote specific regional
economic sectors or industries. A comprehensive tax and zakat administration contributes to the
intensification of fund collection for both parties to strengthen specific economic sectors, which
might result in job creation and unemployment reduction (Mos teanu, 2018).
From these two concepts, both tax and zakat administration focus on compliance and
operational procedures to ensure that funds are collected appropriately and lawfully and can
be monitored, managed and supervised to ensure proper distribution to the appropriate
parties. The paper argues that there are possibilities and potential for the congruence model
to be referred to or applied in the context of zakat funds administration. Following the tax
administration’s pursuit of the congruence model, due diligence has been exercised on
procedural matters to ensure compliance, including the environment, resources and history.
Thus, the paper focuses on zakat administration by using the congruence model to
investigate procedural issues aimed at streamlining management and increasing the zakat
fund. The congruence model is closely scrutinised as a complement model for zakat
administration in terms of delineating zakat administration procedures in Malaysia.

2.5 Zakat management in Muslim countries

Muslim developing countries have tended to treat zakat as a minor component of their fiscal
systems rather than one of the main components. Zakat is a mandatory tax imposed by
statute in six countries: Yemen, Saudi Arabia, Libya, Sudan, Malaysia and Pakistan. In
Yemen, for example, zakat was introduced in the early days of Islam, and the government
was responsible for collecting, distributing and managing it. Besides that, there are those Zakat revenue
countries where zakat is optional, such as Indonesia, Bahrain, Kuwait, Qatar, Oman, the generation
United Arab Emirates, Lebanon, Iran and Jordan (Powell, 2009).
Malaysia, for example, has a solid commitment to zakat management, which is strictly
governed by law. Zakat administration is overseen by SIRCs, which are present in all 14 of
Malaysia’s provinces. Each state has the authority to enact zakat legislation and administer
it appropriately. It has been argued that the appropriateness of managing zakat is crucial in
alleviating Muslim poverty difficulties (Sawandi and Abdul Aziz, 2021). Hence, commitment 1241
and effort, particularly from those directly managing the zakat funds, are considered vital in
improving the management of zakat over time. Malaysian zakat institutions have taken
various zakat collection and distribution innovations to increase the efficiency and
effectiveness of zakat management (Saad et al., 2017). Meanwhile, evidence indicates that the
corporatisation of the zakat institutions in Malaysia has been viewed positively by
stakeholders as their perceived that the zakat institution’s management performance has
improved in terms of collection, disbursement and reporting (Nahar, 2018). In line with these
findings, it is observed that Malaysian experience with managing zakat advanced
technically in both distribution and collection (Migdad, 2019).
In Indonesia, zakat management involves a collaboration between the government and
private amil zakat institutions. Under this collaboration, the government acts as a regulator
and executor starting from the collection, distribution and empowerment of zakat with the
assistance of private amil zakat institutions (Mutamimah et al., 2021). Meanwhile, the
management of the zakat fund in Brunei is governed by the Islamic Religious Council of
Brunei Darussalam. The responsibility to manage the zakat fund is assigned to the Division
of Zakat Collection and Disbursement (Hassama et al., 2019). On the other hand, Zakat Affair
is administered by the Department of Zakat and Income Tax (DZIT), the only official body
in Saudi Arabia responsible for administering zakat affairs. Those conducting business in
Saudi Arabia are subject to zakat, including citizens and companies from the Gulf
Cooperation Council.

3. Methodology
In short, this study is qualitative. Therefore, emphasising the research problem, it assumes
that philosophical assumptions align with the paradigm of interpretivism. The worldview
about the ontological stances is related to the nature of social reality that is analysed based
on the understanding of the performance of the zakat institution’s administration by using a
case study methodology.

3.1 Data collection methods

Generally, the method of collecting data for a study depends on the purpose of the study.
Previous researchers have used various approaches, including qualitative, quantitative or a
combination of the two methods. This study collected data from zakat executives, zakat
administrators and zakat experts. A semi-structured interview method was used in collecting
data required to address the study’s aims. This study will not only be considered qualitative
but may also be seen among various qualitative decisions. It goes beyond what is seen as
qualitative research because it can be undertaken as a mix of qualitative and quantitative
evidence (Creswell et al., 2004; Yin, 2009). According to Gerring (2007), case studies do not limit
researchers to qualitative techniques only. Multiple data are acceptable and can be used in
various strategies, such as case studies (Yin, 2009).
Qualitative researchers study events and individuals in natural conditions and seek to
understand specific phenomena by looking at the individuals’ implications that lead to them
JIABR (Denzin and Lincoln, 1998). Procedural data collection and analysis procedures provide in-
14,8 depth contextual information to understand an organisation’s procedures and
characteristics. Therefore, this study used face-to-face interviews and document reviews.
The face-to-face interview allowed the researcher to interact with the respondents, who
provided the researcher with direct information in constructing the social reality of a
phenomenon. The use of a documentary review is to support the findings from the series of
1242 interviews.

3.2 Face-to-face interview

This study used a face-to-face, semi-structured interview method with the zakat
administration to enable researchers to answer research questions. In general, a face-to-face
interview is a method of obtaining information directly from respondents that is not
available from the document’s source. For example, obtaining information on zakat payers’
confidence in a zakat institution can only be better determined through the interview
method.
The question of how many respondents should be involved in the interview session has
often been debated among previous researchers. Some studies suggest different sample sizes
according to the study method and question. For example, Babbie (2010) and Denzin (2012)
offer one sample size is sufficient for one case study. Guest et al. (2006) propose the
minimum number of respondents required in the case study was 6 and the maximum was
12.
In addition, Creswell and Miller (2000) state that for researchers to fully understand the
phenomenon under investigation, the minimum number of samples is suggested as six, and
the maximum number of respondents must be seven. On the contrary, Curry et al. (2009)
state that for a study aimed at implementing a policy, the number of respondents in the case
study should be around 20 to 30. Such studies need to select respondents with specific
knowledge or experience of the phenomenon under investigation. Finally, Warren (2002)
believes in any case study, 20 to 40 respondents were on the condition that they have a
certain level of expertise in the field under investigation. This study’s participants consist of
one executive member from three selected zakat institutions, one manager of each selected
zakat institution, and three zakat experts who are practitioners in the Islamic finance
industry.
Purposive sampling was used in the study to increase precision in data collection. The
study uses qualitative research methodologies and non-random sampling procedures
because these techniques provide detailed information about the subject under investigation
(Staller, 2021). The research objective is to gather detailed information from the appropriate
responses. Purposive sampling is used in the study to identify and select information-rich
examples connected to the phenomenon of interest (Andrade, 2021).
The nine respondents were chosen to be thoroughly questioned about their zakat
qualifications for income generation. After the data has reached saturation, the interview
session will be terminated to ensure that the data is suitable for analysis to determine its
meaning and essence for addressing research objectives (Lowe et al., 2018). It should be
noted that saturation is used in the study on pure (non-probability) samples, which are
commonly used in qualitative research. Saturation is important because it reflects the data’s
validity (Hennink and Kaiser, 2021). As a result, the saturation criteria are commonly used
for judging qualitative research quality (LaDonna et al., 2021).
According to Hesse-Biber and Leavy (2010) and Sekaran and Bougie (2013), the main
advantage of the interview method is that researchers can tailor the questions where
necessary and explain more issues to clarify any doubts that may arise. This could ensure
the researcher and respondent fully understand the research questions. Interview methods Zakat revenue
also allow researchers to get more detailed information from the respondents. generation
The most recognised types of interviews are structured and semi-structured types.
Generally, both methods align with qualitative research’s principles and standards
(Sarantakos, 2005). The semi-structured interviews lie between the organised (structured)
and unorganised (unstructured) interviews (Guba and Lincoln, 1994). It contains structural
and non-structural components with structured and unstructured questions.
This study used semi-structured interviews to obtain relevant information from zakat 1243
administrators and experts. Researchers designed various questions for selected
respondents. However, in line with Ritchie and Lewis (2003) recommendations, researchers
allow participants to provide answers beyond the research issues/questions asked. To make
the interview successful, the researchers conducted a private visit to the respondents’ places
to interview them. The interview period is one year.
In particular, this study evaluates the efficiency and effectiveness of zakat
administration towards income generation, taking into account issues, specifically on the
zakat administration inputs (environment, resources and history).

3.3 Data analysis

This study used thematic analysis to analyse the qualitative data collected as a result of
interviews conducted. Some procedures, as suggested by Denzin and Lincoln (2000), were
followed in this analysis. This involves the following stages:
 Once the interview is conducted, the researcher will review the results obtained
from the interview.
 Once the record is heard, it will be translated and typed into Microsoft Word
(transcription).
 Each participant’s transcript is read and re-read so that the transcription is accurate.
This level allows researchers to gain a better understanding of the data. Each time
the data is read, it provides a richer understanding of the information (Elsbach,
2005). It allows researchers to import each participant’s transcriptional data into
software that begins coding.
 Once this process is complete, the data will be encoded.

Researchers follow three coding stages in the coding scheme, namely, open, axis and
selected coding (Corbin and Strauss, 2008). Corbin and Strauss (2008) suggest that fracture
data help researchers reduce inclinations in open coding. Based on this suggestion, the
researchers divided the respondents’ data into three themes: environment, resources and
history. The data was then looked at to see if any patterns could be used to find themes or
groups.
Guest et al. (2011) explain the thematic analysis procedure involves examining
information to organise it into a common theme and subsequently examining the
relationship between these themes. To ensure good thematic analysis, researchers need to
ensure that the transcriptions compiled have been placed under different orders and themes.
Researchers must change and redefine the order and theme to achieve satisfactory results
(Braun and Clarke, 2006).
In this study, the thematic analysis of the interviewed data yielded three main themes:
environment, resources and history. These themes are divided into sub-themes, and then, a
component check that describes each theme is carried out. Researchers were careful in this
categorisation stage to identify and examine the meaning of data by comparing and finding
JIABR similarities and differences between components. This level consists of customisation data
14,8 so that the same data falls under the same theme, and different information is grouped under
separate appropriate themes.
Finally, each respondent was shown the interview statements used in the study’s report.
This was done to make sure that the data was accurate and valid. They were asked to check
and ensure that what they said was true. If they disagree with what was said, they can
1244 explain what they meant.

4. Results
Table 2 presents information on the participants interviewed. Table 2 shows three zakat
institution staff, three zakat administrators and three zakat experts who participated in the
study.
The interviews show that the environment, resources and history are the input required
by the zakat administration for income generation. These results could be linked to the
study of Hudaefi et al. (2022), which identifies the key subjects of BAZNAS RI for COVID-19
assistance as education, sadaqah and health services. According to these findings, zakat
institutions must pay attention to the surrounding environment, resources and history to
enable zakat payers to comprehend better the zakat administration and its role in moulding
Muslim society’s social and economic processes.
Figure 2 reveals a strong functional relationship between the main themes, inputs and
sub-themes, which comprise environment, resources and history. These results are based on
interpretations made on the data obtained from interviews.

Items No. of participant %

Executives 3 33.33
Table 2. Zakat officers 3 33.33
Participants Zakat experts 3 33.33
information Total 9 100%

Resources

Environment History

Input

Figure 2.
Main themes and sub-
themes of zakat
administration Zakat Administration
segments Segments
4.1 Environment Zakat revenue
The environment is the first input required for efficient and effective zakat administration generation
operation. Five major environmental stakeholders will determine the zakat administration’s
success (see Figure 3).
Figure 3 summarises the nine interviewees’ responses on how the relationship between
the zakat administration and their stakeholders can impact income generation. By
participants’ perceptions, the zakat administration will be unable to achieve its goals
independently without the assistance of its stakeholders. The findings of earlier studies on 1245
zakat compliance behaviour are consistent with these findings (for example, Hudaefi et al.,
2022; Abdul-Jabbar and Bin-Nashwan, 2022). A crucial aspect of social and economic
processes, Hudaefi et al. (2022) show how the zakat administration should consider factors
like disclosing information through digital platforms. Abdul-Jabbar and Bin-Nashwan
(2022) stress the need to enforce the zakat law to improve zakat payers’ compliance.
Zakat payers, zakat recipients, businesses, banks and legislative bodies are among the
zakat stakeholders. For example, the zakat payer – the zakat institution’s most significant
contributor – plays a vital role in ensuring that the zakat institution achieves its goal of
lifting the poor out of poverty. Zakat funds are obtained due to the zakat payer’s payment of
zakat money. If they do not pay zakat, the zakat institution will not have enough funds to
distribute to the poor. The same is true for companies that pay business zakat. The large
number of zakat funds generated by business zakat can ensure zakat institutions carry out
their responsibilities successfully.
4.1.1 Legislative. Lawmakers are essential for making and passing on any form of
regulation and law that governs any government agency or ministry. In the context of the
zakat administration, its procedures and practices are complex and require the reform of law
and enforcement. Therefore, it must be started by defining the existence of the zakat
enactment to make it clear and enforceable. Only then will it be able to amend or introduce
new zakat enactments requiring legislative approval.
Based on the results of this study, the zakat administration’s operation is completely guided
by the legislative of the federal government. Although the administration of zakat is placed
under the state’s jurisdiction, its legislative affairs are still under the federal government.
Informant 1 states: “What is required by zakat institution for generating zakat income is under
clear laws in terms of the processes and procedures that zakat administrators should follow”.
When asked how often the zakat enactment law is reviewed and modified to match the
current economic reality, Informant 4 answers as follows:

Figure 3.
Environment as a
zakat administration
input
JIABR To be able to collect zakat, you need a clear and enforceable law. This is where lawmakers need to
play their part. In cases where existing laws are outdated, it would signal the legislature’s need to
14,8 review the law in line with current reality as an additional input.
Informant 9 also explained the need for enforcement under existing law. For example, in
Kedah (one of the states in Malaysia), zakat laws had long been enacted and gazetted, dating
back to the 1950s. Although at first this law was enforced, however, later no longer enforced.
1246 Encouraging methods are used to replace this enforcement method.
The finding of this study can be linked to the results found by Abdul Jabbar and Bin-
Nashwan (2022<>). Their study found that social pressure, enforcement and institutional
credibility significantly correlated with entrepreneurs’ adherence to zakat. Bin-Nashwan
et al. (2020) revealed that the structure of the zakat system, such as the complexity of zakat
law and law enforcement, influences the decisions of zakat payers. This suggests that the
two main issues that should be emphasised are as follows:
(1) the need for new laws or provisions on collection and fines to those who refuse to
pay zakat and
(2) enforce the zakat enactment by taking action on those who failed to pay zakat.

The zakat institutions could follow the same actions undertaken by the Malaysian Inland
Revenue Board (IRB). This means that the zakat administration will be able to use the law in
the future to raise funds for charitable purposes. Although these zakat-related laws are
subject to state jurisdiction, state enforcement can encourage more zakat payers to comply
with the laws.
4.1.2 Companies. The company is an entity engaged in business activities. Companies
can be owned by one person or more than one person. Companies can exist in many forms,
from sole proprietorships to partnerships or corporations. Governments can also own
companies, known as government-linked companies. The company is one of the most
significant stakeholders in the zakat environment. Zakat institutions can even be closed if
those companies eligible to pay zakat refuse to pay zakat to them. Therefore, the attitude
and cooperation of the two groups (zakat institutions and companies) towards zakat
compliance, to a great extent, determine the success or failure of the zakat administration
function.
In Malaysia, enterprises with similar or identical backgrounds are often grouped into a
single organisation. For example, the Malay Chamber of Commerce Malaysia organisation
will bring Malay Bumiputera businesses together. The same is true for contractor
companies operating under established contractor associations. Thus, the zakat institutions
can use two methods to approach these companies, either directly with the company or
indirectly through the association in which they become a member. Zakat institutions can
approach and cooperate with these business associations to convey zakat-related
information, for instance, about changes in zakat’s policies and procedures. The business
associations could also assist in administering zakat by stressing professional and ethical
standards on its members to pay zakat legally to the zakat institutions.
In Malaysia, companies are the biggest contributor to tax revenue. However, for the
zakat collection, the biggest contributor is individual zakat payers (Saad et al., 2017). This
could be changed if the zakat institutions continue to take proactive measures and initiatives
to encourage companies to pay their zakat on business income. Informants 2 and 3
confirmed this fact by saying that corporate companies are the main taxpayers and should
also occur in the context of zakat collection that should be contributed mainly by business
zakat. Therefore, zakat institutions should consider that they might not be able to do all
necessary for the ummah development without the company and individual income zakat Zakat revenue
payers as they are their main income source. Concerning the nature of the relationship generation
between the zakat institutions and the company, Informant 1 explained that, at the moment,
the zakat institution maintains a good and friendly relationship with the companies that
lead to the increment of business zakat collection from year to year.
Further analysis revealed that despite the zakat institutions’ progress, some reports
indicate that the zakat institutions earn less than 20% of what they can collect from the
business income zakat. Informant 4 revealed that business zakat collection is still low. 1247
Despite being given a full briefing about business income zakat, they still do not pay zakat,
which causes a decrease in zakat income.
In ensuring adequate awareness of the company’s responsibility for zakat payments,
Informant 8 states that companies should be educated regularly to tell them about their
responsibility to the people to ensure voluntary compliance with zakat. In practice, zakat
payer education and awareness programs are only carried out at newly established
companies that have not yet started paying zakat, which means that zakat education and
awareness programs are not provided to companies that have operated for years.
Continuous efforts through awareness campaigns should be extended to new and long-
established companies in the future for revenue generation. Increased awareness of business
zakat payments will result in more zakat funds in zakat institutions.
The findings of this study are consistent with previous studies on zakat compliance
behaviour. Several elements, including political stability, trust and knowledge, have a role in
the company’s decision to pay zakat, according to Sadallah and Abdul-Jabbar (2022).
Ashurov et al. (2022) concluded that the management elements and efficiency of zakat
collecting and distribution are crucial to enhancing the amount of zakat collected.
4.1.3 Banks. A bank is a financial institution licensed and regulated by a country’s
national central bank. The bank’s purpose is to provide financial services such as receiving
deposits, offering loans, exchanging currencies and deposits of other valuable items.
Generally, there are three types of banks: commercial, retail and investment. Among these
categories of banks, the activities of direct deposit money banks (commercial banks) would
affect the zakat administration’s operations. They help the zakat payer pay the zakat
quickly and reduce the responsibility for the zakat administration. The use of banking
channels can facilitate business transactions and thus expand the potential of zakat and
facilitate the administration of zakat.
In addition, the effectiveness of banks in enhancing zakat administration depends on many
factors, such as the quality of services provided by banks to zakat administration, the
availability of banks across the country, the advancement of bank information, technology and
communication tools and the efficiency and effectiveness of banks in delivering their services.
In this study, participants were asked to express their views on how the zakat administration’s
relationship with other stakeholders could influence its operation. Informants 1 and 9 said that
banks are a medium for collecting zakat funds. When paying zakat, people need bank facilities
to do so, and banks are required to function when collecting funds for zakat. Zakat institutions
also distribute zakat money through the recipient’s bank account.
Banks act as intermediaries between zakat payers and zakat institutions. Riyadi (2014)
dan Sharif and Wahid (2019) stated that Shariah banks could manage zakat funds with
interest-free bank products in addition to the role of board members and healthy Shariah
banking organisations to manage zakat professionally. This statement is supported by
Nomran and Haron (2022), who found that zakat can be used as one of the measures of bank
performance. Each zakat payer, individual or company must have a bank account for each
of their zakat affairs. The zakat institution can work with the bank to determine the amount
JIABR of zakat they should pay through the bank account. This is possible because the amount of
14,8 money in their bank account can indicate that an individual or company has reached the
nisab for zakat payments (Riyadi, 2014; Sharif and Wahid, 2019; Nomran and Haron, 2022).
With today’s technological advances, zakat payments can be made through bank accounts.
Zakat payments can be paid by quick response code, regular deduction instructions, internet
banking, etc. As a result, the bank is an important aspect that the zakat institution should
1248 pay close attention to in light of the impact of the environment on its transformation. Zakat
collection and distribution can be more transparent and accountable if banks are involved in
the process.
4.1.4 Zakat recipients. Zakat recipients are individuals who receive zakat from a zakat
institution. The main purpose of zakat is to reduce the burden on this group. Zakat
recipients are also affected by any policy changes made by the zakat institution (Ashurov
et al., 2022). The recipients of zakat consisted of eight people: the poor, the poor, the amil, the
Muslims, the al-gharimim, the al-riqab, the fishers and the pilgrims, verse 60 of Surah At-
Taubah. They are considered the main customers of the zakat institution.
Based on the stakeholder’s position in the zakat institution, zakat recipients conform to a
major stakeholder definition. This group has a strong influence, and their dissatisfaction will
seriously impact the zakat institution’s sustainability (Ahmad et al., 2015). Serious attention
must be paid to address any issues that cause them dissatisfaction. In addition, zakat recipients
need to be given specific roles in the governance process. In governance, zakat recipients can
provide feedback on the effectiveness of the programs developed and implemented by the zakat
institution (Ahmad et al., 2015). They are the end-users of the program, so they can provide
valuable information that can be used to develop better programs in the future. For example,
the zakat institution can introduce a transformation program to convert the recipient to a zakat
payer and provide them with a better quality of life. Such programs will only succeed if the
zakat recipient receives sufficient technical and financial support from the zakat institution
(Farouk et al., 2018). Thus, zakat recipients need to provide feedback on their progress to assist
the zakat in determining areas where additional assistance can be provided. This effort is in
line with the concept of continuous improvement adopted by the zakat institution.
Regarding the distribution of zakat, zakat recipients can highlight weaknesses in the
distribution process for effective improvement or monitoring. For example, there are cases
where the zakat recipient has to pay for a zakat application form. Such practices are due to
poor monitoring by the zakat institution. This provides an opportunity for irresponsible
people to take advantage of it. As these incidents will affect the zakat institution’s image,
prompt action is needed to rectify the practice and support justice for the zakat recipient. In
addition, the zakat recipients can highlight the bureaucratic and human resources inherent
in the zakat institution. For example, they may comment on unnecessary procedures and
levels of service. However, in reality, the zakat recipients are people with a lower level of
education, making them less humble and with low self-esteem. Usually, zakat recipients will
keep everything to themselves, including their dissatisfaction. Zakat officers should,
therefore, play a proactive role in collecting information and acting as agents on behalf of
the zakat recipient.
Another important role for zakat recipients is their willingness to cooperate and seek
assistance from zakat institutions. Asking for financial support from others involves
dignity, and not everyone can do it. Some individuals are willing to suffer rather than beg
from others. The efforts of the zakat institution to identify eligible zakat recipients,
especially the poor, must be done thoroughly. Sometimes, zakat institutions are often
blamed if the media leads them to search for the poor and needy.
 In line with the findings in this study, previous studies such as Ahmad et al. (2015) and Zakat revenue
Sawmar and Mohammed (2021) also revealed the importance of this group to the generation
sustainability of zakat institutions. Ahmad et al. (2015) found that the satisfaction of the
zakat recipient can influence the zakat payer to pay zakat to the zakat institution. Sawmar
and Mohammed (2021) proposed a model of zakat compliance in which the trust of the zakat
payer is important in influencing them to pay zakat. This belief should be seen when zakat
recipients are satisfied with their assistance from zakat institutions.
4.1.5 Individual zakat payers. This study defines zakat payers as individuals who pay 1249
zakat to a zakat institution. Zakat payers are very concerned about how the zakat goes to the
recipients. Their satisfaction and confidence will be at their optimum level if the zakat fund
is appropriately managed and vice versa. In addition, the zakat payer is directly affected by
any policy changes made by the zakat institution. Zakat payers are Muslims who meet
certain conditions that make them eligible to pay zakat.
Zakat payers are the most important stakeholders in the zakat institution. This argument
is well-understood because the zakat institution’s survival is highly dependent on support
from the zakat payer. If the zakat payers fail to play their role effectively, the zakat’s life will
end. Only increasing the amount of money the zakat payer provides will allow the
institution to perform its duties better (Saad and Sawandi, 2016; Saad et al., 2017).
It is interesting to note that one of the objectives of the zakat distribution set by a zakat
institution is to help the recipients. This reflects the zakat institution’s commitment to
ensure that zakat payers are taken seriously to address low public confidence issues.
Oktavendi and Mu’ammal (2022) and Asmalia and Kasri (2019) explained that the trust or
confidence of zakat payers in the digital system developed by zakat institutions is very
important in influencing the decisions of zakat payers. This statement is supported by
Abdul-Jabbar and Bin-Nashwan (2022), who found that the credibility of zakat institutions
can influence zakat payers. Therefore, the role of zakat payers in providing financial
resources is appreciated. Although the zakat system’s success depends on the cooperation of
all parties, the cooperation of the zakat payer is more important (Siswantoro et al., 2022).
They are considered important agents in the zakat system. This is because they can only
decide whether to pay to the institution or to pay to recipients directly (Andam and Osman,
2019). Therefore, their decisions will have a huge impact on the zakat system. If the zakat
payer pays zakat to the zakat institution is optimised, issues related to the zakat leak will no
longer be a problem.
Payers of zakat should be aware of the positive impact zakat can have on the Muslim
community. As a result, efforts should be made to increase zakat collection. Although the
purpose of the zakat is not to make a profit, the institution must ensure that its management
quality is comparable to that of other firms in the corporate sector. Zakat payers are similar to
lenders or creditors as they provide financial resources to organisations. The role of creditors is
highlighted in the following statement: “Creditors play an important role in several systems of
governance and can serve as external monitors of corporate performance” (Informants 3, 4). At
the same time, some may argue that the purpose of the zakat payer and the lender is not the
same. For example, the zakat payer pays zakat to fulfil their religious obligations, whereas the
creditor gives a loan for a refund (profit). However, their role in providing financial resources to
organisations is similar.
In the zakat environment, zakat payers can play their monitoring role effectively if they
are allowed to participate in activities organised by the zakat institution. In addition,
important information must be shared or disclosed to them to avoid dissatisfaction.
However, most zakat institutions do not share or disclose important information with their
stakeholders. It is also crucial for the zakat institutions to establish and maintain a good
JIABR relationship with the zakat payers. Such relationships are important in increasing the zakat
14,8 payers’ commitment to all activities undertaken by the zakat institutions. Good relationships
create a positive perception of the institution and thus help the institution restore public
confidence. Good relationships also reduce zakat payers to raise their concerns about zakat
administration, especially when they smell something suspicious. Also, zakat payers can play a
proactive role in governance by highlighting public issues that require immediate attention. In
1250 many cases, the zakat payer knows more information from the zakat institution because of its
active interaction with other zakat stakeholders, so it is their responsibility to pass the
information to the zakat institution for improvement purposes. Indirectly, they can put pressure
on charities to deal with public issues wisely.

4.2 Zakat administration resources

The second input to the zakat institution’s transformation process is the resources they need
to perform their functions. As in Figure 4, these resources can be divided into two: tangibles
and intangibles. This will be explained further in the next section.
4.2.1 Tangible resources. Real resources are a very important element in informing the
zakat administration. These resources include annual budget allocation, personnel, systems
and information technology infrastructure, office equipment, vehicles, communications
systems and records. This is stated in the interview session with the study’s respondents
involved. This finding is also in line with the results by Andam and Osman (2019), who
found that the resources owned by zakat institutions are among the factors influencing how
zakat payers view the ability of institutions and, in turn, influence zakat payment decisions.
Bin-Nashwan et al. (2021) also revealed that the resources owned by zakat institutions could
influence the level of trust and zakat compliance behaviour among entrepreneurs.
Informant 1 stated that the resources required by the zakat institution are logistics, vehicles
and work equipment. Informant 4 explained that zakat institutions require funding, logistics and
cooperation from law enforcement agencies in carrying out the zakat function. Another view of
Informant 5 is that zakat institutions need infrastructure support such as software and computers.
Informant 6 explained the need for the latest information and communication technology,
infrastructure and mobility. Other resources required are clear zakat laws, a conducive working
environment, good computers and an internet connection. Informants 7 and 9 pointed out the need
for good communication channels, skilled workers to use and leverage the technology and the
department’s vehicle requirements to facilitate workers’ transportation and asnaf.

Figure 4.
Resources as a zakat
administration input
When asked about the availability of these resources at the zakat institution, Informants Zakat revenue
3, 4 and 6 revealed that the zakat institution has many resources, including computers generation
and communication tools to contact zakat payers and zakat recipients to clarify any
issues that may arise. For this reason, the zakat institution has increased its zakat
collection over time. Other informants explained that today’s success of the zakat
institution is due in part to the contributions of well-meaning and diligent workers.
Infrastructure support and office equipment such as computers and the internet are
1251
available at zakat institutions.
However, having a resource alone is not enough if the employee is inadequate and
trained to use it. Informant 2 states the zakat institution has resources to administer the
institution. The main challenge is the less trained workers, especially how to use and
optimise available resources. If the zakat institution has the equipment, but the staff is not
trained, it does not give any meaning. Therefore, employees must be properly trained,
especially whenever new technology is available.
4.2.2 Intangible resources. Non-tangible sources are non-material sources required by
zakat institutions to perform their operations effectively. Among the resources in this
category are the experience and skills needed to perform the zakat function properly. Other
examples are the legal powers granted to zakat administrators for implementing zakat laws,
the perception of zakat payers and the public on integrity, equality, accountability,
transparency, zakat administration enforcement powers, honesty, commitment and spirit of the
zakat institution staff. Community perception management is also an important source of
information for zakat institutions. Kasri and Yuniar’s (2021) findings are consistent with the
results of this investigation. They observed that the intention to use online platforms to pay
zakat in Indonesia was strongly influenced by performance expectations, effort expectations,
facilitating conditions and zakat literacy. When the zakat institution possesses non-tangible
resources, these expectations and facilities are more likely to be met.
Professional training and education should be an important and ongoing plan to ensure
that the zakat institution has these resources. The training required may be formal or
informal. Formally, it will involve acquiring skills certificates in certain areas with the
cooperation of the relevant authorities in those skills. Attendance at workshops, conferences,
talks and other related skilled enhancement are examples of informal training.
In addition to training, continuing professional education is also crucial in
enhancing the zakat institution’s image and credibility. For example, professional
education in Islamic finance, such as sitting in the Islamic Financial Credentials (AQIF)
examination offered by Bank Negara Malaysia’s Islamic Banking and Finance Institute
(IBFIM), is very relevant for the zakat institution staff. This is because they must work
closely with the fund managers who manage the multinational corporate bond funds.
With the image of their professional qualifications, better collaboration with the fund
managers is possible. This provides an opportunity for increased zakat collection or
another fundraising, increasing the zakat institution’s income. This increase in income
will allow more funds to be distributed to those in need. This is emphasised by
Informant 9, which states that the unrealistic resources required for successfully
implementing the zakat administration are skills and experience.

4.3 Zakat administration history

The history of the zakat administration impacts the current performance of the zakat
institution. Figure 5 shows two primary components of the historical factors that affect the
generation of zakat income: achievement and challenge.
JIABR
14,8

1252

Figure 5.
History as a zakat
administration input

Figure 5 is generated from nine informants’ feedback on how history affects current and
future zakat collections. The results show that adequate knowledge of the zakat institution’s
past achievements and challenges is paramount for future fundraising.
4.3.1 Achievements. The zakat institution’s main task is assessing, collecting and
distributing the zakat to eligible recipients (Sawmar and Mohammed, 2021). Increasing and
strengthening the capacity of zakat administrators is a must. It is important to see how prior
decisions work to redefine policy towards a great achievement. Informant 1 responds to this
by stating that history plays an important role. The target of future collections is based on
the number of collections in the previous year. The history of past zakat collections is
required before the zakat institution can build the future (Informant 2). Informant 3 states
the following:
Previous knowledge lets us know where we are, where we are now, and what we need to do to get
where we want to go. For example, every zakat institution wants to see 100% compliance in zakat
payments. Therefore, we need to refer back to the previous year’s compliance and collection
records to enable us to set our current and future compliance targets.
The history of zakat collection achievement also determines future zakat policies and strategies
(Younas et al., 2021). For example, with the current amount of zakat collection, it is obvious that
zakat institutions cannot solve the country’s poverty problem. This is because the zakat
collection is still low, and compared to the huge amount of funds provided by the government,
it cannot solve the problem of poverty in the country. Thus, what needs to be done now is
understanding the current achievement, especially regarding funds collected and distributed.
Using the financial and non-financial data from the current and previous fiscal years, the zakat
administration can make better-informed judgments concerning the institution’s future. Zakat
administration, for example, can provide short-term and long-term strategic plans to achieve
specific goals. This will ensure the success of fundraising and institutional sustainability.
These findings can be attributed to the study by Al Haq et al. (2021). According to them, the
collection of zakat should be increased because, at present, the collection of zakat is at an
unsatisfactory level, resulting in the number of funds received by zakat recipients being at a
minimum level. Besides, according to them, the funds must be directed to long-term productive
use.
History also shows that zakat structures and systems in the past influenced collecting
and paying zakat in the present. For example, people used to pay their zakat directly to
asnaf. This practice is widely practised in the villages, especially involving the payment of Zakat revenue
zakat for rice. Thus, it is not surprising that to this day, paying zakat directly to asnaf is still generation
practised even though Kedah zakat laws have been declared illegal if the zakat is not paid to
the government (zakat institution). This is extremely detrimental to the administration of
zakat. The leakage of these funds may result in the zakat administration not having enough
funds to give to the asnaf, preventing the goal of zakat from being met.
Fatwas or particular legislation can be established to prevent zakat payers from
continuing to pay zakat directly to the recipients. This will help zakat organisations raise 1253
more money and remain solvent in the long term. According to Sawmar and Mohammed
(2021), who discussed the impact of governance structures on zakat payer compliance, this is
an important aspect to remember. They discovered that procedural fairness was a critical
aspect of the governance and compliance of zakat. It is important to consider prior examples
of how law and its enforcement have been carried out to guarantee that this process is
carried out in a just manner. Thus, the administration of zakat should take into account the
historical aspects of the construction and administration of zakat.
4.3.2 Challenges. Zakat institutions may face some challenges in the past. These
challenges are such that the number of zakat payers is small, sudden management changes,
cases of abuse of power, trust and confidence level and inadvertently failed to pay zakat to
zakat institutions (Farouk et al., 2018). Ahmad (2019) revealed that zakat institutions do not
achieve their objectives because people have little or no trust or confidence in the institution.
In addition, zakat payers also do not like the involvement of political office bearers in the
appointment of institutional administrators, and administrators do not have sufficient
management and administrative knowledge of zakat institutions. To prevent these cases
from recurring, the zakat institution needs to understand these challenges, and management
needs to respond to this issue as soon as possible.
Informant 6 emphasises the importance of history, especially when it comes to the
challenges faced when administering the zakat:
History helps the charity institution identify specific causes and weaknesses so that corrective
action can be taken in the future.
Other informants also expressed the same view that history is very important because if they
do not appreciate the history of past challenges the zakat institution faces, then the zakat
institution cannot function more effectively. For example, the last challenge faced is identifying
factors that influence the behaviour of zakat compliance. If these factors are unknown, it is
difficult for zakat institutions to develop strategies to address these challenges. The future of
the zakat administration will be affected if the problem of non-compliance with zakat payment
is not properly understood. Previous studies (Farouk et al., 2018; Sawmar and Mohammed,
2021; and Kasri and Yuniar, 2021) have commented extensively on the behaviour of zakat
compliance. Suppose the findings of these studies are given serious attention by zakat
institutions, especially in formulating strategies to increase their income. In that case, the
institution has great potential to increase income in the future.

5. Conclusions
The primary goal of this study is to investigate the zakat administration’s input required for
zakat revenue generation. A qualitative methodology that takes a case study approach was
used to accomplish this objective. Based on the analysis conducted, this study emphasises
that for a zakat institution to generate more sustainable funds, inputs should be used before
a strategy can be formulated in the transformation process that ultimately determines the
institution’s outputs or performance. These findings are in line with previous studies such
JIABR as Hudaefi et al. (2022), Nomran and Haron (2022) and Oktavendi and Mu’ammal (2022).
14,8 Although their studies do not directly examine the sustainability of zakat institutions,
studies on zakat compliance behaviour are relevant in justifying the sustainability of zakat
in the future.
The inputs to this transformation process are made up of three main components:
environment, resources and history. These three components are related to each other. For
1254 example, the study results show that the zakat law was already drafted and gazetted.
However, a real law enforcement source needs to be made to ensure its implementation is
successful. If this law is not enforced, then the issue of compliance will remain unresolved.
Studies such as Farouk et al. (2018), Abdul-Jabbar and Bin-Nashwan (2022) and Bin-
Nashwan et al. (2020) have found the existence of a significant relationship in this regard.
Bin-Nashwan et al. (2020) see that the law without enforcement does not affect the behaviour
of zakat compliance. Therefore, zakat authorities should consider efforts to enforce this law
in cooperation with all parties, including the state and federal governments.
Zakat institutions require tangible and intangible resources to implement and enforce the
law. These findings are in line with the findings by Andam and Osman (2019) and Bin-
Nashwan et al. (2021). Andam and Osman (2019) stated the importance of zakat institutions
having sufficient resources because these resources can influence the decision to pay zakat.
Lack of tangible resources (such as annual budgets, information technology systems and
infrastructures) and non-tangible resources (knowledge and skills in using the latest
technologies) may be reasons why zakat institutions do not perform optimally (Oktavendi
and Mu’ammal (2022). As a result, zakat institutions should be helped by providing tangible
and intangible resources that will improve the institution’s future performance.
The generation of funds by zakat institutions is also influenced by history, particularly in
the context of zakat administration in a country. Prior knowledge enables us to understand our
current situation and what we need to do to get where we want to go. Sawmar and Mohammed
(2021) state that the main task of zakat institutions is to evaluate, collect and distribute zakat to
eligible recipients. The task of this zakat institution needs to be strengthened to increase the
capacity of zakat administrators in the future. Thus, the history of zakat collection achievement
is important in determining the policy and strategy for zakat collection improvement (Younas
et al., 2021). According to Al Haq et al. (2021), currently, zakat recipients receive only a
minimum amount of funds. Therefore, funds must be increased to enable the number of funds
received to be sufficient to be distributed to eligible recipients.
Every zakat institution, for example, wants to see that all zakat payers who are eligible to
pay zakat follow the zakat payment law. To that end, the zakat administration must review
the previous year’s compliance records and collect data to set current and future compliance
targets. Even the structure and system of zakat from previous generations might impact
how zakat is collected and paid in today’s world. Zakat payers in Malaysia, for example,
were once permitted to pay zakat directly to the zakat recipient. This is a common practice
in rural areas, particularly regarding the payment of zakat on paddy. As a result, it is not
surprising that paying zakat directly to the recipient is still being practised today, even
though the law has declared that it is sinful if zakat is not paid to the government (zakat
institution). The zakat administration should give such historical aspects due attention to
ensure sustainability and the generation of zakat funds.
Overall, the findings of this study add to the zakat literature and provide new
information to zakat authorities. Studies that focus on new issues, such as zakat institution
fundraising, are difficult to find in previous zakat literature. The creation of this fund is
significant because it will determine the long-term viability of zakat institutions. This study
also uses a new, congruent model and the findings demonstrate the model’s suitability to
explain the inputs required in the process of zakat administration transformation. To the best Zakat revenue
of the authors’ knowledge, this is the first attempt to adapt this widely used model in the tax generation
environment (congruence model). Previous zakat research has relied on psychological models
such as the theory of reasoned action and the theory of planned behaviour, which heavily
emphasise individual zakat payers and ignore the zakat institution as a whole.
There are several limitations to this study. Even though the study is qualitative, it only
used a semi-structured interview method in gathering data. Other data collection methods,
such as document review, observation or focus groups that could corroborate the face-to- 1255
face interview data or findings or serve as the main method of data collection, are not used in
this study. Thus, future researchers are recommended to use, for example, a document
review and a focus group method that may provide richer information on the reform of the
zakat administration to ensure zakat compliance and revenue generation.
The study merely collected data from zakat administrators, zakat staff and experts in zakat.
This study does not collect data from other stakeholders, such as government agencies, banks,
companies and zakat recipients, which significantly explain the performance of zakat institutions.
Future researchers should involve these stakeholders to have fair representatives of zakat
stakeholders.

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1260 Further reading

At-Taubah (1994), “Verses 60, Al-Quran”, in Basmeih, S.A.B. and Ibrahim, H.M.N. (Eds), Tafsir
Pimpinan Ar-Rahman Kepada Pengertian Al-Quran. (Kesebelas), Bahagian Hal Ehwal Islam,
Jabatan Perdana Menteri, Kuala Lumpur.
Sekaran, U. (2003), Research Methods for Business: A Skill-Building Approach, John Wiley and Sons,
Singapore.
About the authors
Ram Al Jaffri Saad is a Professor of the Tunku Puteri Intan Safinaz School of Accountancy,
Universiti Utara Malaysia (UUM COB). He completed his doctoral thesis at the Universiti Utara
Malaysia. He is a Chief Editor for the Journal of Accounting, Finance and Banking (IJAFB). Currently,
Dr Ram Al Jaffri is the Director of UUM Press and Bursary of the Malaysian Accounting Association.
He has authored/co-authored five academic books on financial accounting and one on zakah
accounting and published over 45 refereed articles in academic journals. Currently, he teaches
research methodology, public sector accounting and business accounting to undergraduate and
postgraduate students. He has produced 12 PhD students and 3 Master students. His area of interest
is zakat accounting, zakat institution and behavioural accounting. Ram Al Jaffri Saad is the
corresponding author and can be contacted at: ram@uum.edu.my
Aidi Ahmi currently is an Associate Professor at the Tunku Puteri Intan Safinaz School of
Accountancy, Universiti Utara Malaysia (UUM). He obtained his PhD in Information Systems and
Computing from Brunel University London, UK. He is a member of the Malaysian Institute of
Accountants (MIA) and had been recognised as a Professional Technologist (Ts.) by the Malaysia Board
of Technologies (MBOT). He is also a lifetime member of the Malaysian Accounting Association (MyAA)
and Internet Society (ISOC) Malaysia, and actively involved with the Asian Academic Accounting
Association (FourA). So far, he has authored and co-authored over 80 peer-reviewed technical publications
and successfully supervised seven PhD scholars. His research area focuses on accounting information
systems, auditing, information and communication technology and information science.
Norfaiezah Sawandi currently works at the Tunku Puteri Intan Safinaz School of Accountancy
(TISSA-UUM), Universiti Utara Malaysia. Norfaiezah conducts research in financial reporting,
corporate social responsible and accountability, corporate governance, zakat management and
financial literacy. Her current project is “Islamic Economics and Finance”. She is a Chartered
Accountant (Malaysia) and Certified Financial Planner (FPAM).
Norazita Marina Abdul Aziz is a Senior Lecturer of the Tunku Puteri Intan Safinaz School of
Accountancy, Universiti Utara Malaysia. Norazita Marina’s teaching interests focus on Islamic accounting,
Islamic financial management for zakat and waqf, social and sustainability accounting, integrated reporting
and research methodologies underpinned by her research activities, particularly qualitative research. She is
a Fellow Researcher of the Institute for Strategic and Sustainability Accounting Development (ISSAD) and
Hikma Fellowship program. She is actively involved in undertaking academic research. Her recent research
focuses on Islamic accounting within the Islamic philosophical stances, highlighting the epistemology,
tasawur, ontology and axiology from the Islamic position. Additionally, she is currently pursuing research
activities pertaining to zakat management and zakat accountability in Malaysia.

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