Zakat System for the Poor in Indonesia

Background
Indonesia is the world largest muslim democratic country in the world, which has 88.2% or consist of 202.9 million muslim population in the country (The Pew Forum on Religion and Public Life, 2009). The growing awareness of religion in Indonesia has been dramatically happened in the late 1990’s or the end period of the New Order regime. Indication of this advance for example, more muslim women wearing hijab, more people going to mosques for prayer and also the raising up awareness among muslim to pay zakat as a religion obligation.
Zakat is very important for muslim as one of “five pilar of islam”, besides profession of faith, prayer five times a day, fasting during the month of Ramadhan, and pilgrimage to Mecca (Clarc, 2001, p.52). Alfitri (2006) argued that zakat system has long root from the beginning of Islam, from the Prophet Muhammad era, his successors and continued functioning in many muslim governments until the fall of Ottoman Empire.

The purpose of zakat
The purpose of zakat not only individually to show the piety and gratitude of God’s blessing, but also has a significant social impact to redistribute the wealth as realisation of social and economic justice concept. As poverty is still the big problem for this islands country since the fast growing population (1.136%, 2009 est.), 52% as urban population with high rate of urbanization (3.3% yearly), unemployment (7.7%, 2009 est.), and (17.8%, 2006) of population trapped in poverty (CIA Factbook, 2010), zakat system is an alternative of social safety policy in Indonesia.
There are two kinds of zakat, which is zakatal-fitr (the flat one, equal to two and a half kilograms of wheat or rice, contributed to the needy before the muslim celebration of Eid al-Fitr) and the zakatal-maal (annually imposed to the rich muslim that the wealthy is exceeds such threshold) (Alfitri, 2006). There are different rate of zakatal-maal for different type of asset, vary from 2.5% to 20%, but most of rate is 2.5 % for the net annual income.
Clark, (2001) argued there are eight recipient of zakat (asnaf) as mentioned in Al Quran (muslim holy book) that are:
The poor, the needy, slaves to be emancipated, recent convert to Islam, those in debt through circumstances beyond their control, traveller, those who do the good work of God and those who collect and disburse zakat.

Influenced the nature of zakat
One of sign Indonesia as a democratic country is the growing role of non-government organization in society. Parallel with the growing awareness of religion among muslim, there are many non-government organisations concern to zakat collection and disbursement across the country. There are around thousands of zakat collectors in Indonesia from semi-government such as BAZNAS (BAZ, national zakat and charity collector and bursar) to the pure non-government organisation (LAZ) such as Rumah Zakat Indonesia (Indonesian zakat house), PKPU (justice centre concerning society), Dompet Duafa (Duafa’s Pocket), Al Falah social fund foundation, Baitul Maal (fund) Hidayatullah, and the informal one in many private institutions and also mosques in Indonesia.
Using advertisements in many media (television, radio, newspaper, bill board) with many public figure as attractor, the zakat campaign gain broad support from muslim in Indonesia. In 2008, the amount of zakat has been collected is about 800 billion rupiah (Abimanyu, 2009), rose up from 612 billion rupiah it collected in 2007.
Even though, the realization of zakat collection is under its potential about seven trillion rupiah, many social actions to alleviate poverty can be done from zakat fund, such as giving basic need for the poor, giving scholarship and free education for the poor children and orphan, also free health services for the poor. Many innovative programs conducted by many zakat organisations, some of it are community-oriented programs such as giving productive capital to start small business, free ambulance for dead people, free childcare for the poor, and disaster relief (earthquake and landslide) to many catastrophic parts of Indonesia (Aceh, Jogjakarta, Tasikmalaya).

Key actors in zakat (collection and disbursement)
One problem of zakat collection is, because Indonesia is not an Islamic state the government cannot impose zakat as obligation of its rich muslim. Islamic scholars as epistemic community and one of policy community have significant role to educate about zakat obligation among rich muslim. Some of them also influenced the decision maker to make policy about this issue. Finally, zakat become part of the Government’s policy. The government and House of Representative issued the Law No. 38/1999 of Zakat Management and the Philanthropic Sector, as an umbrella for zakat activities in Indonesia. This law giving basic standard of operation for semi-government and non-governmental zakat collectors, and also boosting transparency and accountability practice among them.
Another support from the government related zakat policy is tax deduction of zakat payer. Alfitri (2006) stated that the issuance of Tax Decision No.KEP-163/PJ/2003 by the Director General of Tax that one article stated zakat paid to BAZ or official LAZ may be subtracted from the gross income of a taxpayer legal body or from the net income of a personal taxpayer up to 2.5% is the advance for zakat organisations. This Tax Decision is partly solve the problem from the issuance of law No. 17/2000 on Income Tax (as amendment of Law No. 7/1983), that conflicting zakat and tax obligation

The future of zakat
However, the amount of zakat has been collected is far below its potential. The 800 billion rupiah collection in 2008 is far below seven trillion rupiah its potential. Even the amount of zakat collection is raise up every year, the demand of transparency and accountability among zakat collectors also growing up since zakat is voluntarily collected. The zakat collectors need the trust from the the zakat payers (mustahiq) besides the need of continuing education about zakat obligation among muslim.
Many innovations and breakthroughs should be achieved by zakat collectors such as using information technology to make zakat easier to pay. The usage of internet zakat for counting and transaction will help zakat payers to fulfil their religion obligation. The more zakat collected the better chance to alleviate the poverty in Indonesia. Finally, the synergy among zakat collector is needed to achieve the ultimate goal to implement social and economic justice concept in Islam.

References:
Alfitri, 2006, “The law of zakat management and non-governmental zakat collectors in Indonesia”, The International Journal of Not-for-Profit Law, vol. 8, no. 2, viewed, 20 March, 2010, < http://www.icnl.org/KnoWleDge/ijnl/vol8iss2/art_3.htm>

Central Intelligence Agency Fact Book 2010, profile country: Indonesia, viewed, 21 March 2010: 10:45.

Clark, Grace, 2001, Pakistan’s zakat system: a policy model for developing countries as a means of redistributing income to the elderly poor, The Haworth Press.

Hukum Online, “Revision of zakat law, the spirit of transparency and accountability of zakat management”, viewed, 22 March 2010: 01:40,


The Pew Forum on Religion and Public Life, 2009, “Mapping the global muslim population, a report on the size and distribution of the world's muslim population, viewed, 21 March 2010: 08:13,


Abimanyu, Anggito, 2010, “Advertisement clips of Indonesian zakat house: the importance of zakat, 2009”, viewed, 22 March 2010: 01:25,


Secretary of The Republic of Indonesia, Law No. 38/1999 of zakat management and the philanthropic sector, Indonesian version, viewed, 22 March 2010: 02:00,