Sustainability of Zakat Accounting in Malaysia

Sustainability in zakat accounting which is often debated in Malaysia involves three issues. First, the method of zakat accounting is income toward the benefits in kind. Second, a business earning profit but working capital is negative. Third, cost of crops and cost of living for commercial agriculture. This paper aims to identify and analyse sustainable zakat accounting practiced by zakat institutions and the opinions of zakat scholars on sustainable zakat accounting in Malaysia. Qualitative data were obtained from document analysis and semi-structured interviews. Informants consist of zakat scholars and zakat practitioners. The data obtained is analyzed through deductive and inductive content analysis. The analysis result showed that sustainable zakat accounting is practiced by the zakat institution in Malaysia. First, a wealth expansion is compulsory for zakat. Second, assessment of compulsory wealth for zakat based on net wealth; and third, the role of intent in determining the compulsory wealth of zakat. Sustainable zakat accounting is based on the views of zakat scholars in Malaysia. It is argued that there is a consensus that the fundamentals used to develop zakat accounting are rigid rats. Therefore, sustainable zakat accounting will continue to be used according to current needs and local conditions.