TRENDS IN MUZAKKI AND BUSINESS ZAKAT COLLECTION IN BRUNEI DARUSSALAM

"This paper examines the last five years of the literature trend on business zakat worldwide. Although, there have been numerous studies on zakat in the past years, studies on business zakat are scarce. The literatures mostly focuses on zakat institutions or zakat management (Sawmar & Mohammed, 2021b), or zakat on an individual basis (Bin-Nashwan et al. 2020). These past studies did not look at the zakat collection in the business sector and no other studies as far as this study concern have used the thematic analysis on the business zakat literature. This paper is the first to use thematic analysis approach introduced by Clarke and Braun (2013) using the software Atlas.ti version 9 (Zairul, 2020) to study business zakat. The literature search encompasses three databases: Scopus, WOS, and ScienceDirect. Four themes are found in this study which are the impact of business zakat, factors influencing the payment of business zakat, issues arising from the business zakat concept, and solutions proposed by some papers regarding the issues of business zakat. Since this study only focus on the business zakat owned by companies, the findings might not be suitable for business ownership owned by individuals. Nevertheless, the findings on business zakat issues are still significant enough to zakat scholars, which could be considered for future studies."

Zakat is one of the obligations on every Muslim with the aim of helping those who are poor and needy while at the same time purifying the wealth and soul of the contributor. There are several types of zakat and one of them is zakat on business. In discussing Shariah issues related to zakat on business, one of the topics discussed is the method of payment of zakat on business, whether paying with money, stocks or business goods or a choice between the two. In view of the need to pay zakat other than using money, especially in the case of companies which have a shortage of cash and excess unsold merchandise, the study was conducted to obtain information on the debate of scholars on the Shariah rule for payment of zakat with goods, and their potential for application in business zakat payments, in addition to the challenges and constraints in its implementation. The study utilized a comprehensive library study, analyzing the arguments and scholars’ discussions related to the subjectand selecting the preferred opinions. The findings showed that in terms of the payment method for zakat on business, some scholars viewed that the payment of business zakat must utilise money, while some stated that the payment must be in the form of goods and stocks of the business itself, while some others stated that the payment of zakat on business is the right of the contributor to choose from money or goods and stocks. The study also found that there were several issues and challenges in the implementation of zakat payments using business goods, including the existing fatwa on zakat on business that stipulated only money would be accepted as zakat payment and it must be paid to zakat authorities. The study also aimed to determine the type of goods to be accepted as business zakat payments, the method of zakat calculations on the goods and whether it should be at original cost price, current market price or premium or discount, and other issues.

This research looks at the understanding of financial managers in corporate companies in the State of Kedah towards the obligations and calculation of business zakat. Most corporate companies in Kedah pay business zakat but not according to the actual assessment. This is related to the level of understanding of the company's financial manager about business zakat. A qualitative approach is used where respondents are selected from among the company's financial managers using a purposeful sampling technique. A semi-structured interview technique is used. The selected companies are two from Government Link Companies (GLCs), one Public Listed Company (PLC) and one subsidiary to GLCs. From the point of view of understanding, it is divided into six (6) themes, namely the definition of business zakat, period (hawl), nisab, zakat calculation method, adjustment and business status. The findings found that the majority of respondents did not understand the definition of business zakat. Most respondents do not know the nisab and business zakat rate. Meanwhile, only 50% of respondents know about the calculation method of business zakat. Some respondents were confused about the adjustment items. Meanwhile, 100% of respondents agreed that only Muslim shares or shares were taken into account in the calculation of business zakat. Overall, the findings showed that the respondents did not understand the business zakat and its calculation method. Zakat authorities can provide more detailed and specific guidance for corporate companies, including assessment methods suitable for different types of businesses, so that the process of valuation and payment of zakat becomes easier and according to the actual assessment.

Religious value is one of the factors determining compliance behavior of zakat as revealed by a number of studies. However, lack of study focused on religious practices and compliance behavior of zakat especially in the business zakat scenario. Hence, the main objective of this study is to determine whether religious practices influence compliance behavior of business owners towards business zakat. 276 questionnaires managed to be collected from SMEs entrepreneurs in Selangor. Rasch Measurement Model was employed to analyze the data. The construct was found reliable with Cronbach Alpha of 0.98. The statistical indicators such as mean square (MNSQ), Z-standardized (ZSTD), point measure correlation (PtMea Corr) and Person Item Distribution Map (PIDM) revealed that among 276 respondents, 106 respondents who performed religious practices meet the business zakat compliance. Interestingly 132 respondents did not comply with business zakat payment even though they perform business practices. The implication of this paper provides evidence of the usefulness of Rasch Measurement Model in identifying the compliance behavior of zakat payment among businesses. It is also able to explain that religious practices really influence Muslim business community to comply with business zakat payment.

Religious value is one of the factors determining compliance behavior of zakat as revealed by a number of studies. However, lack of study focused on religious practices and compliance behavior of zakat especially in the business zakat scenario. Hence, the main objective of this study is to determine whether religious practices influence compliance behavior of business owners towards business zakat. 276 questionnaires managed to be collected from SMEs entrepreneurs in Selangor. Rasch Measurement Model was employed to analyze the data. The construct was found reliable with Cronbach Alpha of 0.98. The statistical indicators such as mean square (MNSQ), Z-standardized (ZSTD), point measure correlation (PtMea Corr) and Person Item Distribution Map (PIDM) revealed that among 276 respondents, 106 respondents who performed religious practices meet the business zakat compliance. Interestingly 132 respondents did not comply with business zakat payment even though they perform business practices. The implication of this paper provides evidence of the usefulness of Rasch Measurement Model in identifying the compliance behavior of zakat payment among businesses. It is also able to explain that religious practices really influence Muslim business community to comply with business zakat payment.

Due to the low amount of business zakat collection in Kedah, this study was conducted to determine whether attitude, subjective norms, behavioural control, and awareness affect small business owners' intentions to comply with business zakat payment. One hundred ninety-one small business owners in Kedah participated in this survey. The data was analysed using the Partial Least Squares (PLS) by utilising the SmartPLS 3 software. The study results show a significant association between attitude, subjective norms, behavioural control, and the intent to comply with business zakat payment. However, awareness does not affect a business owner's intention to comply with Islamic law and pay business zakat. It has been discovered that awareness is a mediator between subjective norms and attitudes towards the intention of paying business zakat. Additionally, the attitude was found to mediate between awareness and intention for zakat payment compliance. The State of Kedah Zakat Board can use the study's findings to develop new strategies and strengthen current strategies to encourage small business owners to pay business zakat.

Business-type Zakat is the second highest contributor in the Federal Territory, Kuala Lumpur. However, business zakat collection results are still satisfactory compared to the number of small and medium enterprises (SMEs) in the Federal Territory of Kuala Lumpur. Thus, the objective of this study is to investigate the factors that influence business zakat compliance behavior by SME entrepreneurs. The Theory of Planned Behavior (TPB) was used in the formation of the research framework. 401 questionnaires were analyzed using multiple regression. Five independent variables influence the behavioral intention of business zakat payers: attitude, subjective norm, perception of zakat distribution, the credibility of zakat center, and the role of amil zakat (R2 = 0.494). Of the three additional variables to TPB, only two showed a significant regression relationship value named as the credibility of the zakat center and the role of amil zakat. Meanwhile, the customer satisfaction variable shows a non-significant regression in the intention of the zakat payer's compliance behavior. Zakat compliance behavior is also influenced by the zakat payer's compliance behavior intention (R2 = 0.299). In total, six variables play an important role in aspects of business zakat compliance behavior and there are three additional variables that need to be paid attention to in future studies. The zakat authorities should pay special attention to each study result to find a solution to the zakat compliance issue of SMEs (Micro) in the Federal Territory of Kuala Lumpur.

Purpose Available zakat accounting standards as well as the laws governing business zakat suggest that the adjusted net working capital or the adjusted growth capital of a business may be regarded as the base for computation of its zakat liability. The apparent consensus follows from the fiqhi prescription of imposing zakat on urud al-tijarah or the inventory of goods available for trade. Some contemporary scholars however question the rationale underlying this method and argue that the objectives of the Shariah are better met by seeking recourse to alternative methods of zakat determination for business organizations. There is therefore a need to revisit the issues and subject them to fresh scrutiny in terms of economic rationality and consistency. Design/methodology/approach The paper examines the arguments of the “orthodox” school as well as those of some contemporary scholars on alternative methods of computing business zakat. It also undertakes a comprehensive review of the laws of zakat as they are related to businesses and the related accounting pronouncements along with their underlying rationale. As the issue of incentivizing zakat payment is an important one, and it is often linked to provision of tax benefits, the paper examines a few suggestions in this regard. Findings On examination of specific suggestions – specifically, of treating earnings as zakat base – to scrutiny in terms of economic rationality and consistency, the authors argue that the “orthodox” position is not only consistent but also makes enormous economic sense. Further, the issue of incentivizing zakat payment and that of lack of harmonization between business zakat accounting and taxation need not be and should not be resolved by making changes in the former because the same has a sound Shariah basis. It can be easily resolved, if need be, by making changes in methods of taxation (tax deduction or tax rebate) and base them on specific items in the balance sheet or the income statement. Practical implications The paper provides useful insights to policy makers who are concerned about the huge gap between actual and potential collection of zakat and are considering tax reforms for incentivizing business zakat mobilization. It highlights the diversity in practices relating to zakat computation and related taxation across Muslim countries. Originality/value The paper searches for and observes consistency and compatibility between the orthodox Shariah-legal position and several accounting and taxation-related policies relating to business zakat. The policy prescriptions are expected to rejuvenate and strengthen the global zakat sector.

This study presents a comparative analysis of waqf regulation, governance, management, and innovation in Muhammadiyah (Indonesia), Malaysia, and Brunei Darussalam. The aim is to identify similarities and differences in their waqf systems and evaluate how governance and innovation impact community welfare. A qualitative library research approach was used, focusing on waqf-related regulations, management structures, and asset development strategies. Muhammadiyah manages waqf independently through internal institutional policies, guided by Law No. 41 of 2004. In Malaysia, waqf is regulated by the State Islamic Religious Councils (Majlis Agama Islam Negeri, MAIN), which promote corporate-based management such as property development and Sharia-compliant investments, exemplified by the Selangor Waqf Corporation (Perbadanan Wakaf Selangor, PWS). Brunei Darussalam centralizes waqf under the Ministry of Religious Affairs (Kementerian Hal Ehwal Ugama, KHEU), with strict regulations and strong state support for Islamic economic empowerment. In terms of innovation, Malaysia demonstrates a more advanced corporate waqf model with productive asset management, while Brunei prioritizes centralized stability. Muhammadiyah continues to adopt new models such as cash waqf and Islamic investments, though improvement is still needed in professional asset governance and transparency. This research introduces a novel comparative framework by analyzing multi-country waqf governance and applying the concept of Good Waqf Governance, including transparency, accountability, and efficiency. Unlike previous studies that examined isolated cases, this paper maps cross-national governance strategies and their socio-economic outcomes. Furthermore, it highlights Malaysia’s and Brunei’s potential as models for Muhammadiyah’s reform. One key recommendation is to integrate Malaysia’s corporate waqf framework into Muhammadiyah’s waqf strategy to enhance long-term sustainability and economic returns. The study contributes to the discourse on Islamic philanthropy by offering scalable strategies for revitalizing waqf institutions in the Muslim world.

The reporting requirements for business zakat accounting in Islamic banking institutions are still in their early stages, with only minimal zakat disclosure currently mandated. Consequently, the disclosure of zakat accounting is insufficient despite its crucial role in enhancing transparency and accountability, building the trust and confidence of the stakeholders, and ensuring compliance with Shariah principles. The primary objective of the study is to analyze zakat reporting requirements and compare them with current business zakat reporting practices in Islamic banking institutions in Malaysia, Indonesia, and Brunei. This study employs a qualitative research approach by examining the annual reports of three selected Islamic Banks, chosen based on the availability and accessibility of their audited financial statements and annual reports for the financial year ending 31 December 2023. A content analysis of the annual reports of Bank Islam Malaysia Berhad, Bank Muamalat Indonesia and Bank Islam Brunei Darussalam Berhad was performed to evaluate the recognition of zakat expenses, the measurement of assets and liabilities for zakat, and the presentation and disclosure of business zakat. The findings are mixed yet interesting. In the absence of approved accounting standards for Islamic financial institutions, Bank Islam Malaysia Berhad has demonstrated full disclosure practices on its business zakat reporting. Whereas, Bank Muamalat Indonesia is still insufficient in reporting the business zakat despite having a proper accounting standard for zakat. For Bank Islam Brunei Darussalam, the business zakat reporting is adequate even though Brunei has only one enactment related to zakat collection and distribution. The measurement, recognition, presentation, and disclosure criteria should be upheld, with additional requirements for full disclosure by zakat-paying business entities. This study proposes the proper establishment of zakat accounting standards to provide comparable and reliable financial information for various stakeholders.

Zakat is one of the five pillars of the Islamic faith, which is an obligatory form of "charity", and every Muslim is expected to contribute. The use of zakat is not only to purify property but to purify the hearts of zakat payers from selfishness and wealth greed. Although it is part of Muslims obligation to pay zakat, the amount collected recordedis still lower and not optimal. The issue of zakat business payment is not often debated particularly on how to increase the number of business zakat payer. This is because zakat on wealth is more than total zakat on the business. Malaysian zakat institution still faces several obstacles to increase the collection of business zakat. Most of the previous studies found that the zakat payer does not know about the basic foundations of zakat especially on business zakat payment. In addition, good leadership in zakat institutions may contribute to the efficiency and effectiveness of zakat funds and indirectly leads to an increase in corporate responsibility and motivating corporate zakat payment. Hence, the purpose of this research is to identify the relationship between the level of knowledge and the leadership of the institution zakat with corporate responsibility and motivating of corporate zakat payment. This research also used the Resource-Based View (RBV) theory. A qualitative method using an in-depth interview with a staff of Hotel Perdana Kota Bharu was applying in this study. The findings show that both were influenced corporate responsibility and motivating of corporate zakat payment.

The research investigated how translation functions as an object of governance in Brunei Darussalam, guided by the polysystem theory. Translation served as a critical component within the communication framework, affecting domains like education, economy, and information technology. Applying qualitative-descriptive methods, including experiential insights and observational data, the research explored how translation activities were regulated and integrated across government institutions to promote social cohesion, accessibility, and national development. In Brunei, translation was essential for ensuring effective communication in legal, health, and religious contexts. Key government entities, such as the Language and Literature Bureau and the Ministry of Religious Affairs, managed translation units to support these functions. The analysis underscored how translation aligned with the national objectives of Brunei Vision 2035, aiming at a high-quality education, improved quality of life, and a sustainable economy. Results reveal that effective translation practices foster social cohesion, equitable access to public services, and national development. Continuous assessment, technological advancements, and human resource development are crucial for maintaining and enhancing the effectiveness of translation as an object of governance. Brunei’s case sheds light on the transformative potential of translation as a powerful tool for governance and holistic development, fostering cultural preservation and inclusivity. The research significantly contributes to the broader discourse on how effective translation governance can facilitate sustainable national progress and cross-cultural understanding.

Government incentive is one of the significant factors that influence the compliance behavior of zakat. However, studies which have focused on government incentive such as zakat deduction and compliance behavior of zakat particularly in business zakat scenario is only next to inexistence. Therefore, this study aims to investigate whether the government incentives influence compliance behavior of business zakat among owners of SMEs.A total of 276 questionnaires collected from Small and Medium Entrepreneurs (SMEs) in Selangor and were analyzed using Rasch Measurement Model. The construct is found reliable with Cronbach Alpha of 0.60, person reliability index at 0.65 and item reliability index at 0.98. The statistical indicators such as mean square (MNSQ), Z- standardized (ZSTD), point measure correlation (PtMeaCorr) and Person Item Distribution Map (PIDM) revealed that out of the 247 respondents, 107 respondents (43.3%) who comply with business zakat payment were influenced by government incentives and 140 respondents (56.7%) who did not comply with business zakat payment probably are not influenced by government incentives. The finding of his study implies the significance of Rasch Measurement Model in explaining the compliance behavior of zakat among SMEs. Specifically, this study finds that government incentive is not influence the decision of owners on SMEs community to comply with business zakat payment.

Government incentives and compliance behaviour of business zakat have a significant relationship as revealed by a few studies. However, the lack of study focused on respondents' response on the government incentives in influencing compliance behaviour of business zakat. Hence, this article examines the usage of Rasch Wright map in evaluating the behavioural response patterns on the government incentives and compliance behaviour of business zakat among SMEs. A total of 276 questionnaires were collected from SMEs entrepreneurs in Selangor. The Rasch Measurement Model was employed to analyze the data. Out of the 276 questionnaires collected, only 247 responses were consistent with the Rasch Measurement Model. Among the respondents, 107 individuals (43.3%) who complied with business zakat payment were influenced by government incentives, while 140 individuals (56.7%) who did not comply with business zakat payment were likely not influenced by government incentives. This study's results highlight the importance of the Rasch Measurement Model in elucidating the response patterns of participants, demonstrating its ability to explain how government incentives impact compliance behavior regarding business zakat among SMEs. This study has illustrated that this method of analysis is expedient in identifying the unusual and inappropriate response patterns and items based on fit statistics and misfit response series compared others. This shows that the Rasch Measurement analysis is an alternative tool to investigate the behavioural response patterns since analyze items and respondents of the study. This study suggests that future research regarding compliance and zakat employ the Rasch Measurement Model analysis as an alternative method to identify ability of respondents and the response behavior patterns among respondents.

Government incentive is one of the significant factors that influence the compliance behavior of zakat. However, studies which have focused on government incentive such as zakat deduction and compliance behavior of zakat particularly in business zakat scenario is only next to inexistence. Therefore, this study aims to investigate whether the government incentives influence compliance behavior of business zakat among owners of SMEs.A total of 276 questionnaires collected from Small and Medium Entrepreneurs (SMEs) in Selangor and were analyzed using Rasch Measurement Model. The construct is found reliable with Cronbach Alpha of 0.60, person reliability index at 0.65 and item reliability index at 0.98. The statistical indicators such as mean square (MNSQ), Z-standardized (ZSTD), point measure correlation (PtMeaCorr) and Person Item Distribution Map (PIDM) revealed that out of the 247 respondents, 107 respondents (43.3%) who comply with business zakat payment were influenced by government incentives and 140 respondents (56.7%) who did not comply with business zakat payment probably are not influenced by government incentives. The finding of his study implies the significance of Rasch Measurement Model in explaining the compliance behavior of zakat among SMEs. Specifically, this study finds that government incentive is not influence the decision of owners on SMEs community to comply with business zakat payment.