What Is Zakat?

Earlier this month, the chief of Federal Territories Zakat Council stated that it is sinful to pay zakat directly to the poor instead of handing it to Zakat collection centers. Subsequently, it was also reported that distrust was amongst the reasons some Muslim’s choose not to contribute to the Zakat collection centers.

In an effort to shed some light on the Zakat issue, we talked to Employer Collection Sector Manager from Lembaga Zakat Selangor (LZS), Encik Wira Mustafa to understand what it entails, why it’s not encouraged to pay Zakat directly to the poor and to find out how the funds are used.

What is Zakat?

Encik Wira: Zakat is the third pillar of Islam and is wajib (compulsory) on Muslim’s who meet all the conditions. The word Zakat itself means to purify. Technically Zakat means a fixed proportion collected from a specific type of mal (wealth) when they reach the haul (specific term) which must be distributed to specific categories of people. Giving Zakat means Muslim’s are purifying their wealth by giving a part of it to the needy as well as to gain Allah’s blessing on their wealth. It teaches us to sacrifice a part of our wealth, to cleanse our wealth by means of Zakat.

As Muslim’s we also believe that everything belongs to Allah as stated in the Quran, “To Him belongs all that is in the heavens and on earth” (2:255). When we are given wealth, there is a portion that does not belong to us which is also stated in the Quran “And in their wealth, there was a right for one who asks and for one who is deprived” (51:19)

A common misconception is that Zakat is a form of Islamic tax system, which it is not. Zakat is an assigned amount that is worth 2.5% of your wealth which is to be paid to the community. The community are then to use the Zakat contributions to support the less privileged among them.

What is the amount of Zakat collected by LZS?

Where does the Zakat contribution money go to?

Encik Wira: LZS focuses on the muqadam (primary) beneficiaries which are the fakir, miskin and mualafasnaf. The Zakat money collected goes into various efforts and aid we provide for them. Among the efforts and aid are for basic living expenses, education fees, and medical bills.

Actually, a large amount of Zakat money collected by LZS goes towards facilitating medical bills for the poor. Specifically the cost of dialysis. The cost to accommodate those on dialysis is about RM2,000 to RM5,000 per person every month. Last year LZS spent close to RM50 million just on dialysis. On top of that, we have 45 thousand people on our list whom we provide aid to. Zakat contribution also goes towards walk in cases we receive daily at our express counters for emergency cases where we provide cash to help them.

Can Muslims give Zakat directly to the poor?

Encik Wira: They may do so, but giving zakat directly to the poor is like the obligatory prayers carried out individually, which means it is sah (valid) but with less reward. When they give Zakat money to Zakat institutions it is like carrying out the obligatory prayer in a jemaah (congregation), it is sah and you get extra rewards for it because the Zakat institutions are better equip to ensure the money is utilised correctly and effectively.

It is also not encouraged because people may not be fully aware if the beneficiaries whom they give the Zakat money to are eligible to receive Zakat. Before a person can be classified as asnaf there are checks involved. Unlike Zakat institutions, an individual would likely not have the ability to carry out necessary checks. If the individuals are not eligible, the contribution will not be considered as Zakat even if you make the niyat (intention) of paying Zakat and the obligation of Zakat would not have been fulfilled.

Another concern is how the money is spent. When people give Zakat directly, it is usually one off contribution, once a year. What would happen to the needy for the remaining months? Zakat money that is given to Zakat institutions are managed to ensure the needy receive aid throughout the year, not just once a year. Zakat institutions like LZS also go beyond just giving the asnaf money. We work towards helping them get out of poverty and we work closely with children from poor families to develop and ensure they get access to higher education.

You see bigger impacts when Zakat money is handed to Zakat institutions compared to giving it directly to the needy. It is important for people to know that Zakat institutions are equipped to handle Zakat contributions to ensure the distribution goes to the right individuals, which is why Muslims are encouraged to contribute to the Zakat institutions.

How does LZS ensure there are no mishandlings of the Zakat money collected?

Encik Wira: LZS is monitored and supervised, we don’t hide anything. From operation costs to the breakdown of Zakat distribution, all of the information is available publicly. Every cent is audited and we are transparent about it all. Audits are carried out through the internal audit by Majlis Agama Islam Selangor (MAIS), quality audit by SIRIM, the national audit as well as state audit.

We publish the data through our website and we also use social media as a platform to inform people of how we distribute the Zakat collection. Our yearly reports, along with the distribution figures are available online and for the public to see so there should not be any issue on lack of transparency.

Note: All of the yearly reports on LZS’s zakat collection and detail of its distribution can be accessed here.

Who are the eligible beneficiaries for Zakat?

What are the criteria that makes it an obligation for a person to pay Zakat?

What are the types of Zakat?

Encik Wira: The types of Zakat are on livestock, crops, and earnings from business, income, savings, gold and silver. There are also the lesser known types of Zakat which is Zakat on KWSP withdrawals and Qadha Zakat.

Looking at the amount of Zakat collected, why are there still poor Muslims?

Encik Wira: Firstly, our main aim is not to eradicate poverty, but we focus more on providing aid to the needy. We do our best to help them get out of poverty but some of the Zakat recipients are comfortable at not having to work and instead choose to continue receiving aid. For us it is always an ongoing effort.

What are LZS’s plans for the future?

Encik Wira: We aim for an increase of 10% every year for Zakat collection, and Alhamdulillah we have reached that every year except during the recession in 1998. We have suggested for schools to include Zakat into their syllabus to increase awareness because right now people only seem to be aware of Zakat Fitrah (Zakat given at the end of Ramadan) and even then people always leave it to the last minute. We are also looking for ways to increase efficiency on Zakat collection and distribution as well as looking into areas where we can reduce operation expenditure.

How do Muslims make their Zakat payment to LZS?

Encik Wira: They can drop by any of the LZS branch to get help in calculating how much Zakat they need to contribute and to make the payment. Additionally, they can make payments online through the eZakatPay

If you’d like to know how to calculate your Zakat, below are examples and the formula. Additionally, you can also use LZS’s online Zakat calculator.

Calculation example for Zakat on savings

Calculation example for Zakat on gold

*Uruf is the normative amount or the customary limit. When a person has gold amounting more than the uruf they are required to make Zakat contribution for it.

Calculation example for Zakat on silver

Formula for Zakat on stock