The Shariah Governance Framework For Strengthening Zakat Management in Indonesia: a Critical Review of Zakat Regulations

Good governance is a crucial issue in the context of strengthening the performance of zakat institutions. As a public organization, the performance of zakat institutions especially in management and service is the benchmark for the growth of public trust. Conceptually, zakat institutions are a pivotal instrument especially in redistributing wealth from the rich (muzakki) to the poor (dhuafa). However, the distributive economic impact of zakat depends on how it is administered, especially with regard to collection and distribution. Unfortunately, the administration of zakat in Indonesia is not adequate, and therefore the full potential of zakat has not yet been realized. The study, in turn, aims at developing and proposing a conceptual model to formulate the sharia governance of zakat management in Indonesia. To this end, it synthesizes relevant literatures on governance, analyzes zakat regulations especially the Law No. 23/2011 and interviews some experts in term of zakat management in Indonesia. As the result, the good governance on zakat institutions as a public organization needs to be placed within the framework of meeting the values of Sharia. The finding also proves the good governance in zakat institutions in Indonesia has been well applied in some aspects of zakat regulations. Yet, in some other aspects, it is not comprehensively implemented. There are some problems in the zakat regulations including limited guidelines and standardization in term of zakat collection, distribution, supervision, and audit. At last, this study shows its contribution as reading material on zakat learning and a reference to formulate policies and guidelines regarding the standardization of sharia governance in zakat institutions.