Zakatability of Contemporary Wealth in Malaysia

Zakat institutions in Malaysia operate under the state’s governance. Despite Malaysia’s attainment of national independence 59 years ago, the management of zakat at both the state and federal levels appears to pose challenges to the system, particularly regarding the uniform imposition of fatwa on zakat, including in the identification of modern assets subject to zakat. This paper aims to analyze the classical and contemporary wealth eligible for zakat in Malaysia, scrutinizing its implementation at state and federal levels and suggesting strategies to overcome associated obstacles. The discussion examines the development phases of zakatable wealth in this country and assesses the zakat governance at both state and federal authorities subsequently, exploring the diverse forms of wealth subject to zakat. This study employs a qualitative evaluation through library research, analyzing policy documents, journal articles, internet sources, and books. The study found that the tremendous improvement in the zakat management efficiency is due to the support from the federal government and the corporatization of zakat institutions. The study also reveals that numerous contemporary wealth and assets, sanctioned by religious authorities at both state and federal levels, fall within the purview of zakat. These encompass various forms of zakatable wealth such as sources of personal income like salaries, remunerations, Employees Provident Fund (EPF), different types of business, investment, finance, and many more. The findings show that zakat authorities in Malaysia accommodate contemporary changes in the concept of wealth and give an opportunity to explore the expansion of other potential resources for zakat. However, some contemporary wealth lacks definition from the Department of Islamic Development Malaysia (JAKIM) or (Department of Endowments, Zakat and Pilgrimage) JAWHAR at the federal level, yet certain state zakat institutions have adopted them for zakat purposes.