1 Dr Mohammed Obaidullah Islamic Research and

Transcript:1 Dr Mohammed Obaidullah Islamic Research and:
1 Dr Mohammed Obaidullah Islamic Research and Training Institute ISLAMIC DEVELOPMENT BANK GROUP REGULATION OF CHARITY IN MUSLIM COUNTRIES: International Experience 2 Comparative Analysis of Zakat & Waqf Laws Studies cover the following countries: South-East Asia Malaysia, Indonesia, Singapore, Brunei Darussalam South Asia India, Pakistan, Bangladesh Sub-Saharan Africa Sudan, Nigeria, Kenya, Tanzania (Zanzibar), Mauritius, South Africa 3 Charity in Islam Forms of charity in Islam: Sadaqa, Zakah, Waqf; broad term for charity in Islam is sadaqa. When compulsorily mandated on an eligible Muslim, sadaqa is called zakah. Shariah rules define the nature of who are liable to pay zakah, at what rate zakah must be paid and who can benefit from zakah. When sadaqa is made in a manner that benefits continue to flow over future time periods, it is called sadaqa jariya, or waqf. Waqf involves holding or setting aside certain assets by the donor and preserving it so that benefits continuously flow to a specified group of beneficiaries or community. 4 Charity Trends in Some Muslim Countries Zakat mobilized increased by over 32 times over 10 years in Indonesia. Zakat mobilized increased by 40 percent (as collected by Government agency) over 3 years in Pakistan. Zakat mobilized increased by 20.2 percent over 3 years in Singapore. Zakat mobilized increased by 7 times over last 12 years and 37 times over 22 years in Malaysia. Zakat mobilized increased by 4.8 times over last 9 years in Sudan. The country to lead in waqf development (maximize revenues from waqf assets) is Singapore followed by Malaysia, Sudan and Indonesia 5 Nature of Zakat Obligation Zakat is either compulsory (#1) or voluntary (#2) in a given jurisdiction. Zakat is compulsory in all the provinces in Malaysia, Sudan and Pakistan. It is voluntary in Indonesia, Singapore, Brunei Darussalam, India, Bangladesh, Kenya and South Africa,. In Nigeria, of the 9 provinces, Bauchi, Zamfara, Niger and Jigawa States have made zakat payment compulsory, while Kano, Katsina, Borno, Yobe and Kebbi states make zakat payment a voluntary act. 6 Incentivize Zakat Payment If zakat payment is compulsory, then #11. There must be strong deterrents against non-payment #111. Law may prescribe physical and/or financial penalty against non-payment (e.g. in Malaysia, marked by reluctance to enforce in a population with great religious and cultural diversity) #112. Law may provide for forced recovery of due and unpaid zakat (e.g. in Sudan) Example of ineffective deterrent in Pakistan: possibility to