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ENHANCING EFFICIENCY IN TAX ADMINISTRATION www.zakat.com.myTALIAN ZAKAT
1 300 88 5757
13TH ASSOCIATION OF TAX AUTHORITIES OF ISLAMIC COUNTRIES (ATAIC)
TECHNICAL CONFERENCE
ESTABLISHING AN EFFECTIVE & EFFICIENT ZAKAT INSTITUTION :
A MALAYSIAN EXPERIENCE IN THE FEDERAL TERRITORIES
Speaker :
HJ. MOHD RAIS HJ. ALIAS
CHIEF EXECUTIVE OFFICER
ZAKAT COLLECTION CENTRE
ISLAMIC RELIGIOUS COUNCIL OF FEDERAL TERRITORIES, MALAYSIA
ORGANIZER
INLAND REVENUE BOARD OF MALAYSIA
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
TABLE OF CONTENT
∙ Abstract. Introduction. History of Zakat Administration in Malaysia. Modernization in Management of Zakat in Malaysia. Changes and Improvement After Corporatization of Zakat
Management in Malaysia. Federal Territories Religious Council-Success Factors of Zakat Collection
. Marketing Strategies in Zakat Collection
. Federal Territories – Zakat Distribution Programs
. Factors in Establishing an Effective & Efficient Zakat Institution
. Conclusion
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
ESTABLISHING AN EFFECTIVE & EFFICIENT ZAKAT INSTITUTION :THE MALAYSIAN EXPERINCE IN THE FEDERAL TERRITORIES
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
DEFINITION OF ZAKAT
Zakat or alm tax can be defined as that portion of a man’s wealth which is
designated for the poor. The term is derived from the Arabic verbal root
meaning ‘to increase’, ‘to purify’ And ‘to bless’. It finds its origin in Allah’s
commands : To take sadaqah (charity) from their property in order to purify and
scantify them.
( At-Taubah : 103)
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Islam is the religion of the
Federation; but other religions
may be practised in peace and
harmony in any part of the
Federation.
In every State other than States not having a Ruler the position of the Head of
religion if Islam in his State in the manner and to the extent acknowledged
and declared by the Constitution, all rights, privileges, prerogatives and
powers enjoyed by him as Head of that religion, are unaffected and
unimpaired; but in any acts, observance or ceremonies with respect to which
the Conference of Rulers has agreed that they should extend to the Federation
as a whole each of the other Rulers shall in his capacity of Head of the
religion of Islam authorize the Yang di-pertuan Agong to
www.zakat.com.my
1.)
2.)
(Article Number 3)
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
HISTORY OF ZAKAT MANAGEMENT IN MALAYSIA
• Colonial Days – British Occupation (1645-1957).
• Kelantan Zakat Notice – 1907.
• Zakat paid to Ustaz or religious teachers who then
distributes to the 8 asnafs.
• Supervising Body – Council of Religion and Malay
Customs.
• Zakat Collected by Village Imam while the Council
distributes.
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
WHY WAS ZAKAT COLLECTION NOT ACHIEVING ITS TRUE POTENTIAL PRIOR 1990’S
• Emphasis was on Zakat Fitr and paddy only.
• No attention given to zakat or mal and businesses.
• Members of public not given detail information or types and zakat calculations.
• Staff requirement could not be carried out.
• No job specification for zakat officials.
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
MODENIZATION OF ZAKAT INSTITUTION IN MALAYSIA
• Highest Authority of Islamic Affairs in each state is the Islamic
Council headed by the Sultan/Raja of each states.
• Council is to establish a Syariah Enactment and to ensure the effective implementation of the enactment in the smooth functioning of Islamic practices.
• Basically Zakat Collection & Distribution falls under three jurisdiction of Baitulmal.
• Since 1990’s – New Zakat Offices as an organised and professional body was established.
• Why? To Empower the Zakat institution and to ensure that Zakat
Rules and Regulation are effectively managed.
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
CHANGES AFTER CORPORATIZATION
• Enhance Capabilities of State’s Zakat Centres in defining its goals,
function & duties.
• More aggressive, professional and teamwork outlook.
• More committed efforts in developing systems.
• More comfortable & attractive office environment.
• Governments & Community realizing the important role zakat
institution can play.
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
MILESTONE OF ZAKAT ADMINISTRATION IN FEDERAL TERRITORIES
1974 1989 2016
Labuan Island was established to be the 2nd
Federal Territory
Putrajaya was established to be the 3rd Federal Territory
Kuala Lumpur was Established to be the 1st Federal Territory
PPZ was established to be a company fully owned by Council to collect zakat on wealth
Federal Territories Religious Council received Clean Certificate without reprimand or its financial statement from National Audit Department 10 years in a row.
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
ESTABLISHMENT OF PUSAT PUNGUTAN ZAKAT FEDERAL TERRTORIES RELIGIOUS
COUNCIL
OBJECTIVE :
• Increase of Zakat Collection
• Increase in numbers of Zakat payers
• Improvement in the professional management practice based on current
technology
• Maximize the level customer satisfaction trough services randed
• Create a working environment base on Islamic Value
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCEwww.zakat.com.my
Year
COLLECTION OF ZAKAT
IN FEDERAL TERRITORIES
FOR THE PERIOD OF 1990 - 1995
1 USD = RM4.135
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1990 1991 1992 1993 1994 1995
Million (RM)
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCEwww.zakat.com.my
RM Million
Year
COLLECTION OF ZAKAT
IN FEDERAL TERRITORIES
FOR THE PERIOD OF 2010 - 2015
282
348
410
492
538565
0
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015
1 USD = RM4.135
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
1. ORGANISATIONAL
CHARACTERISTIC
• Corporatisation
• Concept of Amil
• Computerisation System
• Establishment of Service
Centers
SUCCESS
FACTORS
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
1. Zakat Talks / Briefing
2. Zakat Estimation & Asses. Services
3. Zakat Operations
&
Campaign
4. Mosque Operation
5. Follow-
Ups
6. Summarize Zakat Report
7. Reminders 8. Greeting Cards9. Individual Group
Consultant
10. Group Zakat Collection
11. Salary Deduction Campaign
12. Appoinments
DIRECT MARKETING
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
1. TV
2. Radio
3. Khutbah/
Sermon
4. Presentation5. Group
Assessment & Collection
6. Flyers/
Posters Distribution
7. Exhibition
8. Zakat Seminar 9. Info Day
10. Briefing
11. Talks
INDIRECT MARKETING
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
YEAR
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
ZAKAT DISTRIBUTED (RM)
101,548,407
121,224,318
167,507,847
174,986,013
200,541,409
217,246,481
271,967,597
328,394,455
419,225,908
612,747,408
ZAKAT DISTRIBUTION BY FEDERAL TERRITORIES RELIGIOUS COUNCIL
2006 - 2015
1 USD = RM4.135
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
BAITULMAL VOCATIONAL INSTITUTE (IKB)
Established as a platform to reduce poverty among
muslim family by providing skill/ vocational training
to the family members
2015 RM2.5 million
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
BAITULMAL VOCATIONAL INSTITUTE (IKB)
Courses:
a) Tailoring & Dressmaking
b) Art & Design
c) Food Catering
d) Electrical
e) Building & Construction
22 www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Provide free training courses, monthly allowance,
accomodation & etc to trainees
BAITULMAL VOCATIONAL INSTITUTE (IKB)
Number of trainees since the establishment in 1992:
3,507 trainees
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
BAITULMAL
PROFESSIONAL
INSTITUTE (IPB)
Established in 1992
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
BAITULMAL PROFESSIONAL
INSTITUTE (IPB)
1992-2015:8,705 graduates
95% graduates were hired after graduation
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
BAITULMAL PROFESSIONAL
INSTITUTE (IPB)
www.zakat.com.my
Courses offered:•Diploma in Accountancy
•Diploma in Computer Science•Certified Accounting Technician,
•Bachelor Of Administration•Bachelor Of Accountancy
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
ISLAMIC KINDERGARTENS
Islamic Kindergartens:Offer pre-school education
to children age 5-6 years old as preparation
for primary education
2015: MAIWP manages 82 kindergartens
with6,750 students
Zakat allocation for year 2015:
RM3.65 million
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
MAIWP ISLAMIC SECONDARY SCHOOL (SMA-MAIWP)
Established in 2007 to provide Islamic secondary
education in Federal Territory
Zakat allocation for year 2015:
RM 8.33 million
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
SCIENCE TAHFIZ INTEGRATED SECONDARY SCHOOL (SMISTA)
Established in 2011 as a platform to train young generation to become Al-Quran memorizer and will widely spread in various
job market in the future
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Zakat allocation for year 2015:RM2.5 million
SCIENCE TAHFIZ INTEGRATED SECONDARY SCHOOL (SMISTA)
Educational system combines 2 education curriculum:National Curriculum &
Memorize Al-Quran
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Established in 2003
PUSRAWI INTERNATIONAL COLLEGE OF MEDICAL SCIENCE
(PICOMS)
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
• Diploma in Nursing Science
• Diploma in Pharmacy
• Diploma in Medical Science
• Diploma in Environment Health
• Diploma in Medical Assistant
• Diploma in Physiotherapy
• Diploma in Occupational Health & Safety
• Diploma in Occupational Therapy
• Diploma in Medical Laboratory Technology
Courses Offered:
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
ASNAF EMPOWERMENT PROGRAMMES:
FEDERAL TERRITORIES
33
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Education
Development
& Properties
Shelter & Welfare
Programme
www.zakat.com.my
MAIN ACTIVITIES
Zakat Distribution
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCEwww.zakat.com.my
35
Monthly Financial Aid
Bursary
Education Aid
Entrepreneurship
Taxi Deposit Aid
Build/ Repair House
Emergency
Institute Professional
Baitulmal and PICOM
Non Govermental
Organisations
Ramadan Aid
Medical Aid
Matrimony
Rental Fee (Home)
Disaster's Aid
Baitulmal Scholarships
School Equipment
Tuition
Quran Incentive (Hafiz)
Agriculture
Riqab
Three-Wheeled Motorcycle
Aid for Disable
PICOMS (Education)
Syarie Legal Aid
Fare (Ibnu Sabil)
Al-Gharimin
Mosque Aid
Preparation for
University Entry
F.T. COUNCIL ZAKAT AID’S SCHEMES
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
www.zakat.com.my
ZAKAT DISTRIBUTION:
ASNAF
Zakat collected then channeled
to MAIWP to be distributed
through various schemes
Poor
Destitute
Amil
Converts
Fisabilillah
Al-Gharimin
Ar-Riqab
Ibnu Sabil
The Schemes includes
basic needs aid,
education, entrepreneurshipand welfare
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
ZAKAT DISTRIBUTION
Fulfilment of asnaf
basic needs will help them
to have better life and more
focus to generate
household income
Zakat Aid Schemes
for basic needs :
Monthly Financial
Aid Home Rental Fee
Build/ Buy/ Repair
house
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCEwww.zakat.com.my
Monthly Financial Aid
Cash distribution between
RM250-RM500 a month
Sept 2015:
RM85.44 mil (23,824 recipients)
Rental Fee (Home)
To help the needy
on home rental payment
Sept 2015:
RM 5.86 mil to
2,940 recipients38
ZAKAT DISTRIBUTION
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Sept 2015:
RM1.54 to build and
repair 121 houses
To provide a comfortable
and convenient house as one
of the life basic needs
Build/Buy/ Repair House
ZAKAT DISTRIBUTION
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCEwww.zakat.com.my
Channelled to asnaf who are highly motivated
and have potential
Provided in form of capital, equipment and
training
Field of business:
Laundry, car workshop,
food manufacturing,
restaurant, souvenir etc
Capable to free asnaf from poverty cycle(Impact Program)
ZAKAT DISTRIBUTION : ENTREPRENEURSHIP
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Assistance is available in
form of capital and equipment
worth up to RM5,000
Distributed to Asnaf
Poor, Underprivileged & Converts
Recipients is obliged to attend
entrepreneurship courses held
in which the costs incurred in the
course is provided by MAIWP
Sept 2015:
RM 2.75 mil
755 entrepreneurs
ZAKAT DISTRIBUTION :
ENTREPRENEURSHIP
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Sept 2015:
RM 2.53 mil
540 taxi drivers
A total of RM5,000 is given
as deposits to purchase taxi
This is to help the asnaf to be
financially independent
for their family’s future
ZAKAT DISTRIBUTION :
TAXI DEPOSIT AID
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
To help those who involves in
agriculture
Sept 2015:
RM 1.2 million
15 recipients
ZAKAT DISTRIBUTION :
AGRICULTURE
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Important element to free asnaf from poverty
Provides opportunity to asnaf children
to have higher academic
qualification
Aid given from primary school to
high education level
ZAKAT DISTRIBUTION : EDUCATION
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
Aid rate per year:
Primary School: RM420- RM540
Secondary School: RM600- RM1,200
Sept 2015:
RM14.4 mil
22,550 students
2015:
RM 5.55 mil
20,170 students
To help providing school equipments
such as school uniform,
shoes, bag, etc
ZAKAT DISTRIBUTION : EDUCATION
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
To help students in higher
education institution
2015
RM12.55 million
5,740 students
Preliminary aid to students
who gets an offer to further
studies at higher level
education institutions
2015:
RM 2.7 million
2,422 students46
ZAKAT DISTRIBUTION : EDUCATION
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
To sponsor excellent student
to further studies in
local or foreign university
2007- 2015:
RM 26.67million spent
to sponsor up to 575 students
ZAKAT DISTRIBUTION : EDUCATION
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
www.zakat.com.my
RM Million
Year
COLLECTION OF ZAKAT IN MALAYSIA
FOR THE PERIOD OF 2010 - 2015
1 USD = RM4.135
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
FACTORS IN ESTABLISHING AN EFFECTIVE AND EFFICIENT ZAKAT INSTITUTION
• The need to upgrade efficiency
• The need to actively scout for prospective payers.
• The need to enhance Capital Building for asnaf.
• The need to upgrade Management of Human Resource Development.
• The need to update to the best and latest Information Technology
System.
www.zakat.com.my
INTERNAL
• The need to strengthen Internal Control.
ENHANCING EFFICIENCY IN TAX ADMINISTRATION13TH ATAIC ANNUAL TECHNICAL CONFERENCE
FACTORS IN ESTABLISHING AN EFFECTIVE AND EFFICIENT ZAKAT INSTITUTION
• The need to correct the wrong perception on Zakat Fund surplus.
• The need to change the belief on zakat obligation.
• The need to eliminate confusion between zakat obligation versus CSR.
• The need to eliminate Improper Channel for zakat distribution by payer.
www.zakat.com.my
EXTERNAL
www.zakat.com.my
www.zakat.com.my
ENHANCING EFFICIENCY IN TAX ADMINISTRATION 51
Thank Youَكِثْيًراجزاك هللاُ خيًرا
Speaker :
HJ. MOHD RAIS HJ. ALIAS
CHIEF EXECUTIVE OFFICER
ZAKAT COLLECTION CENTRE
ISLAMIC RELIGIOUS COUNCIL OF FEDERAL TERRITORIES, MALAYSIA