UTHM Institutional Repository

Undisclosed potential of Zakat Payment Deficit

Saksono, Tono and Martin , David Juanil Undisclosed potential of Zakat Payment Deficit. In: 2nd Global Islamic Marketing Conference (GIMC) 2012, 16-18 January 2012, Abu Dhabi, UAE.

[img]
Preview
PDF
Undisclosed_Potential_of_Zakat_Payment_Deficit.pdf

Download (653kB)

Abstract

The purpose of this paper is to scrutinize the potential deficit in the zakat payment of any Muslim business when it is applying a non-shariah accounting system that is based on the Gregorian calendar. As the Gregorian calendar is about 11.5 days longer than the Islamic calendar, the potential deficit is accumulating into one year of unpaid zakat for every thirty-year operation of the business. DESIGN/METHODOLOGY/APPROACH - The study starts with an overview of scientific and shariah analyses of the astronomical phenomena in defining a lunar month in the Islamic calendar. The most current case study and data are provided. This is to stimulate a critical thinking and show that unless Muslims accept astronomical calculation as a sole method, an Islamic calendar will never exists. The study then develops a robust analytical model for the estimation of the zakat deficit when Muslims do not apply an Islamic calendar for their accounting system. Three different datasets are used for the empirical study to bridge the hypothetical assumption, theoretical model, and the empirical findings. FINDINGS - Finally, the paper confirms the hypothetical assumption to find that the zakat loss for the possession of the above assets can be at the tune of US$ 9 million. This robust estimation procedure can be applied to rectify any inadvertent past mistakes and transform them into a shariah compliant payable zakat for Muslims’ business in the future. RESEARCH LIMITATION/IMPLICATION – The research has not used financial statements of Muslims businesses as input; however, this can be easily accommodated once they are available. It is imperative that Muslims construct a reliable Islamic calendar and swiftly reformulate their accounting system based on it; otherwise, the zakat deficit is snowballing and will be burdened by the next generation. ORIGINALITY/VALUE – This is an original and funded research work.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Islamic calendar; zakat payment deficit; Muslims’ civilization debt; flawless shariah economy
Subjects: B Philosophy. Psychology. Religion > BP Islam. Bahaism. Theosophy, etc > BP174-190 The practice of Islam
Divisions: Faculty of Technology Management and Business > Department of Real Estate Management
Depositing User: Normajihan Abd. Rahman
Date Deposited: 24 Dec 2012 07:57
Last Modified: 24 Dec 2012 07:57
URI: http://eprints.uthm.edu.my/id/eprint/2890
Statistic Details: View Download Statistic

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year