THE PROGRESS OF SHARI’AH IMPLEMENTATION IN ZAKAH MANAGEMENT & THE ACTUAL PROCEEDS: MALAYSIA AS A CASE STUDY WITH CORRELATION ANALYSIS

Abstract

This paper analyzes the Malaysian Zakah/Zakat Management, which is related to law and its actual proceeds.Despite numerous efforts being made in many OIC Muslim countries and technological breakthroughs, Zakah is still unable to tackle poverty eradication. This study shows the progress of Zakah by one of the OIC Muslim countries, Malaysia. Malaysia's Zakah actual proceeds are a far cry from a total Muslim population; in fact, approximately 60% of Malaysians are Muslim. Although enjoying tremendous economic growth, Zakah’s potential contribution to Malaysia indicates a gap within the country’s GDP. These failures may relate to Zakah institutions in each state that do not fully adhere to general Islamic law or not follow the fatwa of the Shafi' sect that Zakah is obligatory. The explanation is that, since the country is home to many races and religions, Zakah is exempted from contribution. A prove that the fatwa affects the Zakah's collection, the data would be computed to estimate the proceeds by statistical tools, namely; descriptive, correlation, regression, and the ARDL approach to co-integration testing. This study examines a collection of data between 1991 to 2019 related to economic growth in Malaysia, for instance, Zakah's collection, GDP, interest, inflation, taxes, and unemployment in the country. This paper encourages policymakers to review the decision taken by National Council Fatwa Committee to adhere to the proper fatwa by Shafi's sect and to create effective infrastructure policies.