The Analysis of Fatwa Development Regarding to Zakat Collection in
Malaysia
Hamizul bin Abdul Hamid and Adibah Abdul Wahab
Manager of Dakwah, Lembaga Zakat Selangor (MAIS)
Keywords: Analysis, Fatwa, Zakat, Wealth, Selangor.
Abstract: Fatwa of zakat is the most important element in driving the growth of zakat collection in Malaysia. In facing
the changing times, zakat must also be able to change. Changes in the emergence of new sources of wealth
and changes in wealth ownership should be addressed by the fatwa. The study aims to see how far the fatwas
on zakat collection issued by the authoritative body in Malaysia are working to meet the needs of times. The
state of Selangor as the most advanced state in Malaysia has been used as a subject for the study. The findings
show that from 2001 to 2017, a total of 23 fatwas were issued. The fatwa covers various aspects of the issues
of zakat collection. In conclusion, fatwa on collection in Selangor has been able to adapt and grow, in line
with the needs of times. This good practices could be implemented in other places as well, in order to
maximize the collection of zakat for the benefit of asnaf.
1 INTRODUCTION
Some jurists say that the fatwa has been issued since
the time of Prophet Muhammad SAW alive. This is
because the position of Prophet Muhammad is not
only as the Prophet; but he also held the position of
the head of government, mufti and judge. He became
the people's reference to solve all the problems and
disputes. Some problems related to routine of life, and
some are directly related to the aspect of fiqh law.
Besides he himself issuing a fatwa, he also allowed
some of his companions to do the same. (Salleh,
1992).
For example, while sending Saiyidina Muadz bin
Jabal to Yemen, the Prophet Muhammad has
questioned Muadz what he would do if he was faced
with problems by the Yemeni people. Muadz
explained that he would refer to the Qur'an and as-
Sunnah to find the answer. If it is still not found, then
Muadz will use his mind (without exceeding the
limits of the Qur'an and as-Sunnah) to find the
answer. This has been agreed upon by Prophet
Muhammad (Abdul, 2006).
The emergence of new era, the changes to human
needs and the difference of places has raised new
influence on Islamic law. Islam also spread to various
parts of the world including the archipelago, and has
witnessed many things emerged and influenced
Islamic law (Nashirudin, 2015). But Islam is always
welcome the change, even the fiqh method stated, the
law also changes in line with the changes of needs and
times (Basri, 2011). Certainly, from the aspect of
zakat management implementation, it also changes
and need urgent of ijtihad process (Jani, 2017).
Selangor is the most advanced state in Malaysia
with the largest population and represents the true
Malaysian demographic aspect (Azzis, 2014).
According to Malaysia Population Statistics (2016),
The Statistics Report 2016 released by the
Department of Statistics Malaysia, Selangor is
estimated to have the highest population in Malaysia,
which is 19 percent or 6.02 million people out of the
total 31.7 million Malaysians.
Selangor is also the richest state in Malaysia with
the largest contributor to Gross Domestic Product
(GDP) of 22.7 per cent (Selangorkini, 2017). This
scenario occurs, because the Selangor State economy
is directly affected by international factors. For
example, Selangor is directly included in the
Indonesia-Malaysia-Thailand Triangle Growth
(IMT-GT). Through this collaboration, key strategies
have been developed and focused on various sectors
of the economy such as investment, industry,
agriculture, fisheries, transportation, communication,
energy and tourism. (Laporan Tinjauan Rancangan
Kajian Struktur Negeri Selangor 2035, 2017).
Certainly Selangor receives a wealth of wealth and
can increase income to its residents.
Hamid, H. and Wahab, A.
The Analysis of Fatwa Development Regarding to Zakat Collection in Malaysia.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 575-580
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
575

Selangor also still remains one of Malaysia's largest
agricultural land. Its involves the plantation and
fisheries sector. In 2000, the primary sector
contributed Gross Domestic Product (GDP) by RM1,
509 million or 3.2% of the total GDP of the State of
Selangor. Of these, 69% or RM1, 038 million were
contributions from agriculture and forestry activities,
while 31% were from mining activities, as reported in
the Selangor State Structural Plan 2020. The value of
this GDP increased by 51% to RM2, 282 million
(1.8% of total GDP in Selangor) in 2010, accounting
for 93% of contribution to agriculture and forestry
activities, and 7% of mining activities (Laporan
Tinjauan Rancangan Kajian Struktur Negeri Selangor
2035, 2017).
It is clear that Selangor is indeed a richest state
and its rich resources are also very diverse. It can be
summarized into three main sources. The first source
of employment-based wealth (employment income),
second from wealth-based business resources and
third, wealth based on agricultural resources. On that
basis, the zakat fatwa in Selangor must take into
consideration the diversity of these resources. It is to
ensure the sustainability of zakat-based wealth
sharing can be implemented and ensure the fate of the
needy Muslims continue to be assisted.
2 LITERATURE REVIEW
2.1 Fatwa
Fatwa means to explain. In the term of syarak, fatwa
means the answer is made by the mufti or the person
who is faqih on a matter or fiqh law when asked about
it, or reveals the law of Allah SWT whether it is
obligatory or not obligatory (Bahari, 2014). A fatwa
issued by a state has legislative power (legally) so it
binds the public to stick with it (Kasan, 2006). It is
reasonable, in order to create unity of mind and
practice among Muslims. It fulfils the requirement of
the fatwa itself, as a mechanism to avoid conflicts and
prolonged disputes among Muslims (Kasan, 2006).
Mufti means, everyone who has the ability of
Islamic knowledge, so he can issue fatwa. However,
in order to safeguard the state's interests and prevent
the seeds of differences that may cause of the dispute,
the mufti is appointed by the government (Kasan,
2006). The mufti is given power and responsibility to
issuing fatwa that can help the government's duties in
executing the government. The earliest Islamic
government to appoint a kadi or mufti is the Bani of
Abbasid Empire who has appointed Abu Yusuf to
issue a fatwa (Buang, 2016).
In the context of the state of Selangor, the mufti
was appointed by His Royal Highness the Sultan as
the Head of State Islamic Religion. Mufti is also the
Chairman of the State Fatwa Committee, which is
responsible for holding meetings and discussions on
a legal issue. Each fatwa issued by the committee is
referred to as fatwa jamaie (Kasan, 2006).
The Malaysian Constitution has given the right to
administer Islamic religion to the state government.
This is explained in the Malaysian Constitution. In
1989, the Selangor State Legislative Assembly as
state lawmakers made an amendments to the Islamic
Law Administration Enactment, by separating
between the administration of the Selangor Islamic
Religious Council, the Mufti Department and the
Syariah Courts. From that same year, job of issuing
fatwa, which was previously handled by the Selangor
Islamic Religious Council, was handed over to the
Mufti Department (Selangor Islamic Legal
Enactment (EPPI), Section 28, 30) (Nasohah, 2005).
However, the Mufti Department or Mufti itself,
cannot issue a fatwa privately. The Mufti will carry
out his duties with a committee known as the Fatwa
Committee, comprised of several other specialists,
either representing governmental agencies or even
individuals who are accredited to be a member of the
fatwa committee (Nasohah, 2005). Hence, laws
across the country in Malaysia including Selangor
prescribe, a statement or religious law issued by a
mufti should not be considered a fatwa, unless it is
officially issued through an official Fatwa Committee
appointed by the Sultan or the government. Each
fatwa must also go through some of the established
procedures (Bahrom, 2011).
2.2 Fatwa-Fatwa Analysis Collection
Zakat
In 16 years, 23 fatwas on zakat collection have been
issued by the Selangor Fatwa Committee, which is
can be divided into five categories:
1) Fatwa on new wealth of zakat
a) January 16, 2001, fatwa on income. The
decision, the zakat income law is mandatory
for Muslims and all Muslims who live or work
in Selangor shall pay income zakat to the
Selangor Zakat Center.
b) 22 December 2009, fatwa on zakat investment
stock. The decision, the zakat law on stock
investment, is equal to zakat of business goods
('arud tijarah), regardless of whether the stock
investment is to be traded or stored.
c) 20 April 2010, fatwa on zakat payment by unit
trust management company. The result, zakat
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576

on the unit trust fund is according to the zakat
method of business goods ('arud tijarah).
2) Fatwa on the ownership of new forms of zakat
property
a) July 24, 2001, zakat fatwa on companies
owned by various types of shareholders who
mix Muslim and non-Muslims. The decision,
a company that is mixed between Muslim and
non-Muslim shareholders, is subject to zakat
on Muslim only.
b) July 24, 2001, zakat fatwa on firms and
consulting firms. The decision, obligatory
zakat on firms and consulting firms if enough
obligatory zakat.
c) March 24, 2005, fatwa on collection of rice
zakat through direct deduction from paddy
pads in Selangor. As a result, zakat padi
should be deducted by 5 per cent of the
proceeds obtained without deducting any costs
by paddy entrepreneurs. Money from paddy
coupons is calculated as subsidies from the
government and should be issued zakat by 2.5
percent (as income zakat) if sufficient nisab.
d) February 21, 2006, the fatwa on the income
tax (business) of Felda and its subsidiaries.
The result, Felda is obliged to issue zakat on
its revenue and its subsidiaries if its accounts
are controlled by Felda. If the accounts of
felda subsidiaries are operated separately, the
subsidiaries are obliged to issue separate
income (business) zakat.
e) 27 August 2009, a fatwa on approval and view
on issues of obligations to pay business zakat
for Registered / unregistered business, Muslim
and State / Federal Government-Linked
Companies (GLCs), Payments in Selangor if
trading in Selangor, and the parent company
pays zakat business on behalf of the subsidiary
3) Fatwa on payment methods or wealth zakat
collection method
a) Date not recorded. Fatwa on zakat payout of
the Employees Provident Fund (EPF)
immediately upon withdrawal. As a result,
EPF contributors are encouraged to issue zakat
after receiving or withdrawing the EPF money
if it reaches the nisab, without having to wait
a year.
b) January 16, 2001, the fatwa on payment of
zakat through Maybank2u (internet). The
decision, should use zakat payment method
through Maybank2u (internet) service.
c) 19 February 2002, the fatwa on zakat payment
via Islamic credit card / card bank. The
decision, pay zakat with credit card / Islamic
bank card.
d) July 23, 2002, fatwa (proposed zakat payment)
Bizz Channel (by Bank Bumiputra
Commerce). The decision, not allowing the
zakat of Selangor to use the service as it
involves usury which is banned by Islam.
e) 4 August 2009, Fatwa payment of zakat fitrah
via electronic payment. The decision, should
use the payment method of zakat fitrah via
Short Message Service (SMS), either by
prepaid or postpaid.
4) Fatwa on administration and management of
zakat collection
a) July 24, 2001, a fatwa on the proposals of
women and non-Muslims as amil zakat
salaries (income). The decision, should be
appointed by Muslims to manage salary and
income zakat (should not appoint non-
Muslims as amil). Whereas, it should appoint
women as amil zakat.
b) April 16, 2002, fatwa co-ordinating the
method of determining zakat fitrah throughout
Malaysia. The decision, agreed to set the
weight of rice at a rate of 2.7 kg and according
to the rice price set by the National Rice
(Bernas).
c) October 4, 2016, the fatwa on the handover of
zakat to the NGO appointed by the Islamic
Religious Council and Malay Customs Perlis
(MAIPs, an entity outside of Selangor). The
decision, the assignment of zakat to those who
are not appointed by the Selangor Islamic
Religious Council (MAIS) and the Selangor
Zakat Board (LZS) without the permission of
the ulama amri are illegal by the law and do
not comply with existing laws (enactment).
d) 31 January 2017, a fatwa on the Selangor zakat
management system. As a result, the fatwa
agreed to update the existing zakah property
with 9 improvements:
i. Common Affiliate Property Type, that is,
all the same property of the property
shall be incorporated including the
property based on the golden nisab.
ii. Income Zakat, which is an additional,
that is Resource / Non-Employment
Outcomes. And The Take-Up Position
for a single proprietary Trader who takes
a personal purpose is calculated as a
mandatory income.
iii. Assessment of Zakat Wang Simpanan, is
based on the amount of savings at the end
/ end of the haul after deducting the
The Analysis of Fatwa Development Regarding to Zakat Collection in Malaysia
577

moneys earned in the current year that
has been disbursed.
iv. Zakat on Takaful Savings / Insurance
Charged with zakat on cash can be
issued. Upon maturity or receipt of
compensation:
v. Zakat on Shariah Non-compliant Gold
Investments (invalid), only the original
capital of the investment is subject to
zakat.
vi. EPF Zakat, there are three decisions. For
retirees who are under age of retirement
(55 years), EPF contributions are
deductible when calculating income tax.
All production is calculated as income
and should be added together with other
income. Money in the EPF is not subject
to zakat. For contributors who work / still
retire after the retirement age of 55 (55
years), contributions to the EPF can not
be deducted from the calculation of
income zakat. Money that is still stored
(not removed) is considered to be the
property of the owner and must be
included in the calculation of the deposit
zakat. There is no need to clean up all the
EPF funds before the creation of EPF-
Islamic.
vii. The Savings Fund position at Tabung
Haji, it is bestowed on two.
Contributions during the current year and
Existing Deposits in Tabung Haji, then
the savings fund in Tabung Haji needs to
be added together with Other Properties
for Gold for the purpose of sufficiency
nisab.
viii. The effect of Zakat on Debt, which is for
debts believed to be earned is obligatory
zakat and is included in the category of
savings. The payable is calculated as the
property of the owner and is obligatory.
ix. Double Zakat Adjustment, i.e. for
property acquired from the current
income that has been sustained, shall be
refused to prevent the incidence of
double immunization on the same
property.
5) Update format for zakat property combination of
gold nisab and zakat property income.
3 RESEARCH METHOD
Malaysia has 14 states, 14 fatwa institutions, led by
14 different mufti (Jabatan Kemajuan Islam
Malaysia, 2011). Therefore, Malaysia does not have
the National Mufti, as this is the case because the
Malaysian Constitution puts the legislative authority
on Islamic religion under the jurisdiction of the state.
It is provided under the Ninth Schedule, II, State List,
Item 1 which provides for, among others, zakat, fitrah
and baitulmal or similar Islamic religious results
(Bahrom, 2011).
Accordingly, this study will focus only on the
development of fatwa in the State of Selangor which
is considered to represent the true aspects of
Malaysian demographics. Meanwhile, the fatwa that
will be analysed is from 2001 to 2017, which involves
a period of 16 years. This study wanted to analyse
what fatwa has been developed over the past 16 years
in Selangor. It also wants to study, whether the fatwa
meets the changing form of wealth and changes in
property ownership. The study also wanted to
analyse, to what extent the development of the fatwa
has affected the performance of zakat collection in
Malaysia.
4 RESULTS AND DISCUSSION
After analyzing, there are some findings on the
development of zakat collection in Selangor, it is:
1) The development of fatwa on zakat collection in
Selangor is divided into five segments:
a) Fatwa on new wealth of zakat
b) Fatwa on the ownership of new forms of
zakat property
c) Fatwa on payment methods or wealth zakat
collection method
d) Fatwa on administration and management of
zakat collection
e) Fatwa on the update of zakat harta
2) On average, annually for 16 years, 1.4 fatwa
issued by the Selangor Fatwa Committee on the
collection of zakat property in Selangor. This
shows that the process of issuing fatwa zakat
property in Selangor is running consistently and
constantly updated to celebrate the continuing
changes in the rapid development of wealth in the
state of Selangor.
3) The fatwas issued are more focused on the Fatwa
on the Zakat Property Update (six fatwa),
followed by the Fatwa on the New Property
Sharing of Zakah and Fatwa Properties on
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
578

Payment Methods or Zakat Collection Methods
(five fatwa), then the Fatwa on Administration
and Management of Zakat Collection (four fatwa)
and the least is the Fatwa on the New Zakat
Wealth (three fatwa).
4) Found in the New Zakat Fatwa segment in
Selangor, zakat property income is the most
important issue in production. It was issued five
times, the first time in 2001 that obliges zakat on
employment, the second time on 24 March 2005
touching on zakat on rice coupons backed up to
the third, fourth and fourth income on October 13,
2009 regarding the income zakat of the non-
compliant property of sharia and the payer's and
fifth-rate bills on January 31, 2017, which adds to
the provisioning and collection-based property of
the private business. It seems that the
development of property zakat fatwa in Selangor
strongly emphasizes the aspect of zakat on
property income, in accordance with Selangor's
position as a developed state and has a high-
income workforce.
5) Found on the Fatwa segment on the New Property
Sharing of Zakah Properties, most fatwa touches
on business zakat. Overall there are six new things
about zakat on the business that has been touched,
namely (1) zakat on mixed and Muslim non-
Muslim business (24 July 2001); (2) zakat on
firms and consulting firms (who carry out non-
commodity business services) (24 July 2001); (3)
zakat on holding company and subsidiary (21
February 2006); and 27 August 2009 covers two
issues, namely (4) business zakat for registered
and unregistered Business and (5) zakat for State
/ Federal Government-Linked Companies
(GLCs); and last (6) place of payment of zakat for
business company. This shows that the
development of fatwa in Selangor also takes into
account aspects of wealth in Selangor now
dominated by business development, including
individualized businesses, partnerships,
government ownership and stock investment.
6) Found in the Fatwa segment on Administration
and Zakat Collection Management, the whole
fatwa touches current issues which require
immediate response, namely (1) 24 July 2001, a
fatwa on the proposals of women and non-
Muslims as amil zakat in salary / income; (2) 16
April 2002, fatwa co-ordinating the method of
determining the zakat fitrah throughout Malaysia;
(3) 4 October 2016, the fatwa on zakat handing
over to a party who does not have a valid cite
permit; (4) January 31, 2017, the fatwa on the
Selangor zakat management system has a huge
impact, which includes nine improvements in the
zakat collection system, including merger of
property, the addition of zakah property, zakat on
debt, zakat savings and change in assessment
method zakat. The speed of the fatwa issuers in
responding to these changes has enabled the LZS
as zakat operators to adapt to the changing times.
7) It is found in the Segment Zakat Segmentation
Fatwa segment, it also focuses on the changes that
occur from time to time in socioeconomic aspects
in the state of Selangor. It involves (1) May 9,
2004, a fatwa on the determination of the rate of
'gold or gold of Selangor (2004 - 2009); (2)
September 14, 2004, the fatwa on the rate of 'uruf
of gold jewelry in Selangor; (3) October 13, 2009,
the fatwa on the revaluation of zakat property
income obtained from a non-compliance path; (4)
13 October 2009, the fatwa on the revision of
income zakat on the breakdown of kifayah limit;
(5) 11 August 2015, the fatwa on the obligations
of business-related government-linked companies
(GLCs); and the latest is (6) 27 April 2017, a
fatwa on the amendment of investment status in
Permodalan Nasional Berhad (PNB) which was
previously declared non-compliant at all. Again,
the strength of the Fatwa Committee to respond to
socio-economic changes has enabled the LZS to
prepare itself for the needs of times.
5 CONCLUSIONS
Clearly from this study that the rapid development of
fatwa and celebrating the changing times in Selangor
has had a very positive impact on the collection of
zakat in Selangor. It is evident in Figure 1, until LZS
is able to make zakat collection of RM674 Million in
2016. If the Selangor State Fatwa Committee is slow
and too rigid (does not celebrate the various fuqaha
views in issuing zakat fatwa, which is very desirable
to study in future research), then there are many
issues regarding the development of zakat property as
well as zakat management that cannot be answered
immediately. This is fairly paradoxical by various
parties handling fatwa deals, especially in states that
put fatwa as the basis and guidelines for law
enforcement. As soon as the fatwa is released, many
new property issues can be addressed and, most
importantly, have had a very positive effect on
Muslims and raised the image of the Islamic State in
the eyes of the world.
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