Page 5 - Zakat in Malaysia

ZAKAT IN MALAYSIA

EARLY HISTORY...

In May 1989, Dato’ Dr. Yusof Noor, Minister at the Prime Minister’s Department and
Chairman of the Federal Territories Islamic Religious Council of (MAIWP), held a
discussion with Dato’ Haji Abdul Rahim Abu Bakar to establish a more systematic
and orderly system for the management of zakat collection. Zakat management,
especially in the Federal Territories, was found to be deficient and weak resulting in
low annual zakat collections and low number of contributors. Consequently, more
comprehensive zakat distribution programmes could not be implemented. During
the discussion, it was proposed that an agency known as Pusat Pungutan Zakat
(PPZ) or Zakat Collection Centre be established with the main objective of improving
zakat collection. Improvements in zakat collection, resulting in substantial amounts
of zakat collected, would enable the public treasury or the Baitulmal of MAIWP to
actively implement zakat distribution programmes and distribute zakat funds to the
eight categories of asnaf (eligible zakat recipients).

Based on a related study approved by MAIWP, a consulting firm, Coopers &
Lybrand, was appointed to conduct research to determine the best approach for the
establishment of PPZ. A special committee, headed by Dato’ Haji Abdul Rahim Abu
Bakar and with Tuan Haji Omar Thean Abdullah, Dato’ Mohd Zihin Hassan, and Tuan
Haji Khalid Abdul Aziz as members, was formed as a consequence of this research.
The team extended the research further based on the recommendations made by
Coopers & Lybrand, focusing on potential problems and, simultaneously, aiming to
identify new concepts for the establishment of an efficient zakat collection agency.

The special committee then agreed with the proposal put forth by Coopers & Lybrand
to implement the concept of corporate management for the Zakat Collection Centre.
This proposal was operationalised by establishing a subsidiary under MAIWP based
on the concept of a Corporate Amil.

On 27 December 1990, a historic milestone was achieved with the introduction
of a computerised system for zakat payments. Subsequently, PPZ-MAIWP was
inaugurated by the fourth Prime Minister of Malaysia, Dato’ Seri Dr. Mahathir
Mohamed, on 8 March 1991. These events marked a new era for zakat institutions
with the implementation of corporatisation and computerised systems for zakat
payments in Malaysia, particularly in the Federal Territory of Kuala Lumpur.

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