Zakat Versus Taxation: An Overview of the Implementation in Malaysia

Abstract

Zakat is one of the pillars in Islam where it is a mandatory 2.5% take on the wealth of well-to-do Muslims as already mentioned in Quran and Sunnah. Meanwhile, taxation is considered as a contribution levied on the persons, property or business for the support of the government. InMalaysia, the lawgoverning income taxation is the Income Tax Act 1967. Both zakat and taxation play an important role especially towards the development of socioeconomic in Malaysia. However, the relationship of these two elements are hardly found in the literature. Therefore, this conceptual paper aims to explore the differences in terms of the implementation of zakat and income taxation, particularly in Malaysia. The significance of the study is to provide additional literature and knowledge to the public, so that the issues related to zakat and income taxation can be further discussed in order to give positive impact to the society and nation.