ZAKAT AND SUSTAINABLE DEVELOPMENT GOALS: A REVIEW ON ZAKAT COMPUTATION AND DISCLOSURE AMONG ISLAMIC BANKING INSTITUTIONS IN MALAYSIA
DOI:
https://doi.org/10.33102/iiecons.v10i1.110Keywords:
Zakat, Islamic Banks, Computation, DisclosureAbstract
The most crucial step in reaching the sustainable development goals (SDGs) is reducing poverty, and zakat as a wealth distribution mechanism has an impact on this goal. Islamic banks' zakat payments contributed significantly to lowering poverty levels. As a result, Islamic financial organisations that satisfy the requirements must fulfil their corporate zakat responsibilities in accordance with standard given. Additionally, the bank needs guiding principles, including the zakat calculating procedure, for assessing commercial zakat. Hence, the purpose of this study is to look into how Islamic banking institutions in Malaysia compute and disclose their zakat currently. The study initially employs content analysis of the annual report. The annual report of 16 Islamic banks for the year 2021 are used to analyse the current zakat computation method. Using the content analysis technique, this study discovered that the growth method is the most desired method, used by six banks, followed by the working capital method, used by five banks. According to the study, the methodology employed by Islamic banks to calculate zakat vary from year to year, with some banks seize up to utilise a consistent system. This study will not only improve comprehension of Islamic accounting literature, specifically zakat computation methods, but will also provide useful insights for practitioners and relevant authorities. Each Islamic bank should have a clear policy in place for assessing accurate commercial zakat, including the zakat computation methods.
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