Why Do Companies Pay Their Alms Tax (Zakat)? Case Studies Of Compliance With Corporate Zakat Obligation In Islamic Commercial Banks In Indonesia

DOI

10.2991/iclj-17.2018.6How to use a DOI?

Keywords

Corporate Zakat; Religious Obligation; Legal Fiction; Individual Conscience

Abstract

Corporate zakat –obligatory alms giving payable by business entities– have been studied by some companies in Indonesia despite its ambiguous status in both Islamic jurisprudence and Indonesian law. This paper aims at exploring how the corporate community in Indonesia views the legitimacy of regulating corporate zakat. It will focus on compliance with corporate zakat in Indonesian Islamic Banks in. It will also identify whether ethical, religious or secular values that have prompted the banks comply with corporate zakat in order to find out how Islamic charity and corporate social responsibility may converge in sharia business sector in Indonesia. Using a case study as research method and thus multiple sources of evidence from structured interviews and archives (annual, financial, and good corporate governance reports) for triangulation, I will conduct detailed contextual analysis of each bank's experience when deciding to pay or not to pay their zakat. This study finds that the Islamic Commercial Banks' view on legitimacy of regulating corporate zakat in Indonesia is influenced by a combination of two to three factors: their type of business (i.e. as Sharia-related industry), their attitude toward the principles of zakat in Islam, their size (i.e. amount of profit considered eligible to pay zakat), and benchmarking to other competitors. A combination of factor number one and two become the most significant factors.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Alfitri
PY  - 2017/11
DA  - 2017/11
TI  - Why Do Companies Pay Their Alms Tax (Zakat)? Case Studies Of Compliance With Corporate Zakat Obligation In Islamic Commercial Banks In Indonesia
BT  - Proceedings of 1st International Conference of Law and Justice - Good Governance and Human Rights in Muslim Countries: Experiences and Challenges (ICLJ 2017)
PB  - Atlantis Press
SP  - 23
EP  - 26
SN  - 2352-5398
UR  - https://doi.org/10.2991/iclj-17.2018.6
DO  - 10.2991/iclj-17.2018.6
ID  - 2017/11
ER  -