Papers by Adibah Ab. Wahab
Journal of Islamic Philanthropy & Social Finance; Vol.1 (1); 2019 , 2019
This research is conducted to investigate factors that influenced zakat payment among companies o... more This research is conducted to investigate factors that influenced zakat payment among companies or business entities. The study is based on qualitative analysis conducted on decision makers at 14 companies. This research uses semi structured interview format and use thematic technique for data analysis. The result shows that, efforts done by zakat institutions, actions taken by government and internal initiatives are the three main factors. Excellent customer service, efficient disbursement and good governance are the three main component for zakat institutions. Tax rebate, tax deductions, fatwa rulings and enforcement are the elements for governments' role that can affect zakat payment. However internal motivation factors are the most dominant. It consists of three elements i.e. Board Directors understanding, Muslim Board Directors composition and company financial status. Above all, Board Directors understanding is the most crucial. Therefore, marketing effort should be focusing on decision makers of the companies through understanding their behavior. This study contributes to the theory and gives insight on factors affecting zakat payment by business entity.
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The purpose of this study is to estimate potential zakah on business collection and to discover z... more The purpose of this study is to estimate potential zakah on business collection and to discover zakah gap from public listed companies (PLCs) segment. This quantitative cross-sectional study examines the zakah status of 817 Shariah compliant companies endorsed by Shariah Advisory Council of the Securities Commission (SC). Financial data is obtained through a census study from the latest annual report and another 705 annual reports were examined. This intensive study, based on the 30% largest shareholder report, reveals that 118 companies are considered 'owned' by more than 30 percent of individuals who are Muslim. The total zakah amount during the assessment of eligible companies was then used as the basis for determining 'zakah potential'. As a result, the total
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In this paper, we reviewed previous studies on factors contributing to zakah (alms) compliance be... more In this paper, we reviewed previous studies on factors contributing to zakah (alms) compliance behavior among business entities. We first summarized the most relevant studies on zakah compliance and identified the possible determinant factors from 24 studies. Our analysis revealed 24 factors significantly associated with zakah payment. Then, we grouped and combined these factors into three major categories-organizational factors, governmental factors and internal factors. The organizational factor consists of four supporting elements: services provided; dakwah and marketing activities; effectiveness of zakah distribution; and good governance, including transparency. The governmental
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In this paper, we reviewed previous studies on factors contributing to zakah (alms) compliance be... more In this paper, we reviewed previous studies on factors contributing to zakah (alms) compliance behavior among business entities. We first summarized the most relevant studies on zakah compliance and identified the possible determinant factors from 24 studies. Our analysis revealed 24 factors significantly associated with zakah payment. Then, we grouped and combined these factors into three major categories- organizational factors, governmental factors and internal factors. The organizational factor consists of four supporting elements: services provided; dakwah and marketing activities; effectiveness of zakah distribution; and good governance, including transparency. The governmentalfactor comprises another four elements: allocation of law, tax incentives, whether in the form of allowable expenses or rebate; fatwa and encouragements. The internal factor consists of three elements: internal quality of decision makers, board directors’ composition, and financial strength. Based on this review, we proposed actions to be taken, especially by the zakah authority, to increase zakah collection from corporate entities
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Thesis Chapters by Adibah Ab. Wahab
Zakat is one of the main religious dues in Islam. Zakat does not only purify one’s wealth but als... more Zakat is one of the main religious dues in Islam. Zakat does not only purify one’s wealth but also a mechanism to uplift the socio-economy of the ummah. According to National Fatwa Committee, business entities which formed under principle of syakhsiyyah i’tibariyyah (legal entity) are obliged to pay zakat under the the principle of khultah (group ownership). However, factors which influence business entity’s zakat payment are still not properly defined and very limited researches done on this. The aim of this research is to identify zakat payment influencing factors in business entities and take Public Listed Companies (PLCs) as research subject and decision makers in PLCs as research object. Through mixed-method research design, this study uses secondary data, interviews and questionnaires. Secondary data from PLC annual reports are used to understand the scenarios, estimates potential zakat collection and identify the collection gap for this market segment. From 817 shariah-compliant listed companies, 118 companies have more than 30% muslim ownership and 17 companies pay zakat. From the analysis, total zakat potential is RM291.5 million and the collection gap is RM215 million a year (74%). Based on qualitative data from interviews with 14 companies and quantitative data from 113 questionnaires (13 companies), the study reveals three main factors that influence zakat payment by business entity, i.e. effort done by zakat institution (Zakat Institutional Role), action taken by government (Government Action) and companies’ own initiative (Internal Motivation). The result indicates that Zakat Institutional Role has three sub factors i.e. services provided by the institution, zakat disbursement program and good governance. As for Government Action there are three underlying sub factors i.e. fatwa ruling, tax incentives either in the form of rebate or deduction and legal enforcement. Internal Motivating factor also has three sub factors i.e. board directors understanding, muslim board director composition in the company and financial performance. Internal Motivation is the most influential factor with the highest significance value. It plays important role as the mediating factor between Zakat Institutional Role and Government Action with zakat payment. All variables and their relationships are explained in a schematic path diagram called Zakat Payment Model for Business Entity. This hierarchical model is evaluated and assessed following Partial Least Squares - Structural Equation Modelling (PLS-SEM) procedures, i.e. measurement model, structural model and mediator analysis. In conclusion, this study successfully provides empirical evidence on potential zakat collection in PLC segment and the influencing factors for business entity zakat payment. This study contributes to the theory, literature and insight on factors affecting zakat payment by business entity particularly for PLCs and provides better understanding of current scenarios on potential zakat collection in PLC market segment in Malaysia.
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Papers by Adibah Ab. Wahab
Thesis Chapters by Adibah Ab. Wahab