Understanding zakat reporting practices in Malaysia: A case study of Shariah-compliant companies
DOI:
https://doi.org/10.24191/jeeir.v14i1.8412Keywords:
zakat, disclosure, shariah-compliant, reportingAbstract
This paper aims to investigate the zakat disclosure practices in Shariah-compliant companies in Malaysia. The zakat information is important for stakeholders of Shariah-compliant companies to know whether the company is paying zakat on their behalf or otherwise. Disclosing such information is also necessary to eliminate the uncertainties within the Shariah principles and avoid doubt among the stakeholders. This information is crucial, particularly for investors who may have different accounts with different Shariah-compliant companies, as they must know who is the party that pays the zakat. The objective of this study is achieved through analysing fifteen Shariah-compliant annual reports for the year 2023. The study used a content analysis covering the material aspects, including presentation, method use, obligations for payment of zakat, and components of zakat information. The results indicate that zakat disclosure practices remain low among the Shariah-compliant companies in Malaysia. The sample companies show a limited amount of information about zakat, such as the method used, the amount of zakat, and the components of zakat information. Furthermore, the zakat disclosure of the sample selection, whether following MASB Tri-1 or otherwise, does not meet the standard as recommended by the technical release.
References
Abbas, S. Z. M., Sulaiman, S., & Bakar, N. A. (2018). A review on zakat payments by Islamic banks in Malaysia. International Journal of Zakat, 3(4), 71-82. https://doi.org/10.37706/ijaz.v3i4.107
Abd Samad, K., Said, R., Kamarulzaman, M. H., Mahshar, M., & Normaya, I. (2015). Exploring the zakat payment and firm’s performance of Islamic banks in Malaysia. In Proceedings of the 6th International Conference on Governance, Fraud, Ethics and Social Responsibility.
Abdullah, M., Sapiei, N. S., & Rohim, S. N. (2023). Disclosure of corporate Zakat among Muslim-owned companies on Malaysia. Al-Qanatir: International Journal of Islamic Studies, 30(2), 312-320. https://al-qanatir.com/aq/article/view/660
Abdul Razak, S. H. (2020). Zakat and waqf as instrument of Islamic wealth in poverty alleviation and redistribution: Case of Malaysia. International Journal of Sociology and Social Policy, 40(3/4), 249-266. https://doi.org/10.1108/ijssp-11-2018-0208
Abojeib, M., Lukman, B., Ahmed, M. U., & Ahmad, M. (2019). A review of zakat practices of Islamic financial institutions in Malaysia. In 7th ASEAN Universities International Conference on Islamic Finance (7th AICIF 2019) (pp. 136-144).
Abojeib, M., Mahaini, M. G., & Alchaar, M. O. (2025). An analysis of zakat disclosure in Islamic banks. Journal of Islamic Accounting and Business Research, 16(4), 811-837. https://doi.org/10.1108/JIABR-04-2021-0123
Accounting and Auditing Organization for Islamic Financial Institutions. (2020). Financial Accounting Standard (FAS) 9 on Zakat. https://tinyurl.com/53585ju8
Adam, N. C., & Lode, N. A. (2015). The communication of Islamic information by Shariah-compliant companies in Malaysia. Advanced Science Letters, 21(6), 2081-2084. https://doi.org/10.1166/asl.2015.6214
al-Qaraḍāwī, Y. (1999). Fiqh Az-zakat: A comparative study; the rules, regulations and philosophy of zakat in the light of the Qur'an and Sunna. Dar Al Taqwa.
Al-Sulaiti, J., Ousama, A. A., & Hamammi, H. (2018). The compliance of disclosure with AAOIFI financial accounting standards: A comparison between Bahrain and Qatar Islamic banks. Journal of Islamic Accounting and Business Research, 9(4), 549-566. https://doi.org/10.1108/JIABR-10-2017-0144
Che Azmi, A., Ab Aziz, N., Non, N., & Muhamad, R. (2016). Sharia disclosures: An exploratory study from the perspective of Sharia-compliant companies and professional users. Journal of Islamic Accounting and Business Research, 7(3), 237-252. https://doi.org/10.1108/JIABR-03-2016-0029
Jabatan Kemajuan Islam Malaysia. (2001). Panduan zakat di Malaysia. Jabatan Kemajuan Islam Malaysia.
Kadir, M. R. A., Wafa, S. M. G. W. S., Abdullah, A. A., Abdul Kadir, M. R., & Abdullah, A. A. (2020). A study on disclosure for business zakat in Malaysia. European Proceedings of Social and Behavioural Sciences, (100), 269-278. https://doi.org/10.15405/epsbs.2020.12.05.28
Lewis, M. K. (2001). Islam and accounting. Accounting Forum, 25(2), 103-127. https://doi.org/10.1111/1467-6303.00058
Malaysian Accounting Standards Board. (2006). MASB technical release i-1: Accounting for zakat on business. Malaysian Accounting Standards Board. https://www.masb.org.my/uploadfile/Accounting%20for%20Zakat%20TRi-1.pdf
Md Zaini, S., Sharma, U., Samkin, G., & Davey, H. (2019). Impact of ownership structure on the level of voluntary disclosure: A study of listed family-controlled companies in Malaysia. Accounting Forum, 44(1), 1-34. https://doi.org/10.1080/01559982.2019.1605874
Obaidullah, M. (2016). Revisiting estimation methods of business zakat and related tax incentives. Journal of Islamic Accounting and Business Research, 7(4), 349-364. https://doi.org/10.1108/JIABR-10-2014-0035
Omar, P. M. F. F. A., & Hajimin, M. N. H. H. (2023). The roles of zakat towards Maqasid Al-Shariah and sustainable development goals (SDGs): A case study of Zakat institutions in East Malaysia. International Journal of Zakat, 8(Special), 68-81.
Saad, R. A. J., Farouk, A. U., & Abdul Kadir, D. (2020). Business zakat compliance behavioral intention in a developing country. Journal of Islamic Accounting and Business Research, 11(2), 511-530. https://doi.org/10.1108/JIABR-03-2018-0036
Shariah Advisory Council of the Securities Commission Malaysia. (2022). List of Shariah-compliant securities by the Shariah Advisory Council of the Securities Commission Malaysia. Securities Commission Malaysia. https://www.sc.com.my/development/icm/shariah-compliant-securities/list-of-shariah-compliant-securities
Tajuddin, T. S. (2022). Comparative analysis of business zakat computation of Islamic financial institutions in Malaysia and Saudi Arabia. International Journal of Islamic Economics and Finance Research, 5(1), 1-16. https://doi.org/10.53840/ijiefer62
Wan Ismail, W. A., Kamarudin, K. A., & Sarman, S. R. (2015). The quality of earnings in Shariah-compliant companies: Evidence from Malaysia. Journal of Islamic Accounting and Business Research, 6(1), 19-41.https://doi.org/10.1108/JIABR-03-2013-0005
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Syeliya Md Zaini, Nurul Hidayana Mohd Noor, Noor Azlin Mohd Kasim
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
