Abstract
The practice of zakat is gaining popularity in Indonesia. This development is attributed to the strong role of the government in consistently developing zakat infrastructure and the increased awareness of people to practice zakat. Despite this success, a mechanism for predicting future zakat collection has not yet been developed. This study applies Holt's exponential smoothing and Auto-Regressive Integrated Moving Average (ARIMA) model to forecast zakat in Indonesia using zakat collection from 2009 to 2014. Results show that Holt's exponential smoothing is best fits the zakat time series data and is therefore suitable for forecasting zakat. Holt's exponential smoothing is comparable to the ARIMA model given its small deviations in mean absolute percentage error and mean square error. Moreover, the software used to implement Holt's exponential smoothing is similar to that used in ARIMA models. These similarities show that these models can accurately forecast future trends to prepare proper strategies and plan the future of the organization. These models can also be used to develop a plan for managing charity based on the number of recorded mustahiq.
Highlights
Islam is a complete religion that teaches Muslims how to perform shalat and how to help others by giving through zakat
The results of the exercise were compared with the results obtained through the implementation of the classical rules based on the Root Mean Square Error (RMSE)
This method is suitable for forecasting zakat
Summary
Islam is a complete religion that teaches Muslims how to perform shalat and how to help others by giving through zakat. Zakat is frequently mentioned in the Holy Qur’an after the word shalat, which implies that zakat is important as shalat This concept suggests that Islam requires Muslims to obey Allah vertically through shalat and to help each other horizontally or economically by paying zakat. Zakat committees play an integral role in collecting donations from the community and distributing these donations to the needy. The centers should be equipped with an effective zakat management system to facilitate the execution of the center’s functions, especially in the collection and distribution of zakat. Most zakat centers lack an effective method of managing zakat collection and distribution.
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