Introduction

Zakat (alms-giving), one of the five pillars of Islam, is a personal obligation that a faithful Muslim must perform on behalf of God. The word zakat, related to the Arabic word for purity, implies that by giving away a part of one's wealth, the rest has been cleansed. If a Muslim does not pay zakat, the wealth earned over the course of a year is illicit and unclean and punishment awaits on Judgment Day. The Quran tells believers what kinds of wealth are subject to zakat; it also details how much should be given. Those whose wealth (al-mal) exceeds a certain minimum (nisab, set by the Prophet at 88 grams of gold) must pay zakat at the rate of one-fortieth, or what is generally stated as 2.5 per cent of the total each year. If one's wealth doesn't meet the minimum of nisab, he or she owes nothing. If one has more than nisab, he or she must give. A Muslim who has nothing, too little, or owes money, may receive zakat. But not only is zakat a purifier of wealth, it is also a leveller of wealth – the world's first system of social security (Benthall, 1999). Finally, the Quran states that the poor and the needy need not be ashamed of accepting a small portion of another's wealth. They owe nothing in return for, as Sayyid Qutb wrote, zakat – because God ordered the giver to give, and the recipient has the God-ordered right to receive – precludes the ‘hatred of the recipient toward the donor’ (Ibid.: 36) or criticism of those who need it (Kozlowski, 1998: 282).

Despite the attention granted to zakat in the Quran and the hadith, neither suggests that it needs to be collected centrally and disbursed by a single authority. As such, for centuries Muslims in many jurisdictions paid their zakat in the simplest of ways: often face to face, such as when handing it directly to the poor, or giving it to the imam to distribute from the local mosque. Indeed, this is primarily how zakat was handled in Malaysia until quite recently.

Malaysia is one of only six Muslim nations worldwide today which centralises zakat collection at the level of the state; it has done so since the late 1950s.