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Friday, 10 April 2015

A bigger role for zakat in development

Paying alms is one of the Five Pillars of Islam. Adults must regularly give zakat, or alms, if their wealth exceeds a certain amount according to Muslim teachings.
Indonesia, the world’s largest Muslim-majority country, has seen the amount of alms given by its expanding middle class grow in recent years — and the government has been keen to redirect alms from simple charity to improving public services by using the money to finance government programs and development projects.

The National Alms Agency (Baznas), which records the how much money is raised by regional alms agencies (Bazis) and private foundations, has reported that 
Rp 3.2 trillion in alms was collected in 2014, up from Rp 68.4 billion (US$5.3 million) in 2002. 

However, the amount of alms raised last year was equal to only 1.5 percent of a potential Rp 217 trillion that could be raised in Indonesia, according to a report from Baznas, the Bogor Institute of Agriculture (IPB) and the Islamic Development Bank (IDB).

 “Zakat fund [management] and government development programs actually share a similar purpose: to help distribute welfare payment to society,” Baznas executive director Teten Kustiawan told The Jakarta Post in a recent interview. 

Raising more alms will make it easier for government-sanctioned alms agencies (BAZ) and independent zakat foundations (LAZ) to support the government’s economic, education, public health, religious and welfare programs, according to Teten.

According to the 2011 Alms Management Law, Baznas supervises national zakat collection and distribution. The law also stipulates that zakat management must be directly managed by Baznas, licensed mass organizations or legal entities endorsed by Baznas and local authorities. 

If the amount of zakat collected continues to increase, Baznas expects the government to start integrating alms as an alternative source to finance the country’s development program, Teten says, specifically by including zakat as a non-state-budget source in the country’s National Mid-term Development Plan (RPJMN).

The absence of a formal financing model, however, does not prevent alms-management agencies from contributing to government social safety net programs, such as the new national health insurance (JKN) program managed by the Healthcare and Social Security Agency (BPJS Kesehatan).

Several major alms-management agencies, including Baznas and the privately run Dompet Dhuafa (Wallet of the Poor), have helped the BPJS cover premiums for thousands of poor people after validating their identity and eligibility. 

 “After their [BPJS] premiums are covered by zakat funds, these poor people are able to visit BPJS facilities near their homes instead of travelling to our facilities. It will help them save time and money,” Dompet Dhuafa’s Rumah Sehat Terpadu (RST) hospital medical services director Kukun Masykur said.

Located in the West Java city of Bogor, the 100-bed RST hospital was established in 2012 and currently provides free medical services for poor patients.

Separately, while IPB Islamic finance expert Irfan Syauqi Beik said he was optimistic about the potential for using alms to support government’s development programs, he wants Baznas to consolidate the operation of alms-management agencies across the nation to reduce inefficiencies and avoid overlapping distribution programs.

“If necessary, Baznas should merge several smaller alms-management agencies to improve management systems and accelerate zakat funds collection in a particular region,” he said.

Abdul Djamil, the Religious Affairs Ministry’s director general of haj and umrah (minor pilgrimages), was the chairman of the committee choosing candidates for Baznas’ commissioners.

He said that state involvement in national zakat management was “permissible”, if it was in the public interest.

“The simplification of our national zakat management operation will encourage alms agencies to work harder to gain and maintain the trust of both zakat payers and zakat recipients.

(The Jakarta Post / 05 April 2015)
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