Effectiveness Role of Zakat in Reducing Income Inequality Among Muslim Society

Mohd Rahim Khamis; Maryam jameelah Hashim; Azman Ab Rahman

doi:10.33102/uij.vol36no03.604

Authors

Mohd Rahim Khamis Faculty of Business and Management ,42300, UiTM Cawangan Selangor Selangor Darul Ehsan, Malaysia https://orcid.org/0000-0002-3179-7222
Maryam jameelah Hashim Center for Economics and Finance Studies, Faculty of Business and Management Universiti Teknologi MARA, 42300 Puncak Alam, Selangor https://orcid.org/0000-0002-7219-2035
Azman Ab Rahman Faculty of Syariah and Law, Universiti Sains Islam Malaysia Nilai, Negeri Sembilan, Malaysia

DOI:

https://doi.org/10.33102/uij.vol36no03.604

Abstract

Zakat is widely acknowledged in the Muslim world as a vital strategy for tackling poverty and income disparity. Zakat is crucial in reducing the income gap between the rich and the less fortunate. This study seeks to provide a more detailed analysis of the importance of zakat in mitigating wealth inequality among the Muslim population in Selangor. This study aims to determine the elements that impact the efficacy of zakat institutions in mitigating the economic disparity among the impoverished and destitute population in Selangor. The survey was carried out among those who receive zakat in four districts of Selangor: Kuala Selangor, Hulu Langat, Petaling, and Klang. The selection of these districts was based on their status as having the biggest concentration of zakat recipients in Selangor. 394 questionnaires were provided to Zakat recipients, and the data were analyzed using PLS-SEM to assess the efficacy of Zakat in mitigating income disparity. The empirical evidence suggests a notable correlation between an effective management system, ongoing monitoring of zakat recipients, organized zakat distribution, and the efficacy of zakat in diminishing economic inequality among the impoverished and destitute in Selangor. The findings indicate that zakat institutions should promptly implement policy steps to improve their distribution routes to effectively reach the intended recipients. This study enhances the current body of knowledge by focusing on the scarce research about zakat and income inequality. Hence, future studies must prioritize the examination of the variables that influence the effectiveness of zakat allocation

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