Understanding business zakat compliance: insights from SME Owners in Selangor

This paper aims to determine factors affecting on business zakat compliance behaviour among SMEs owner in Selangor. In addition, this study also analyses these factors based on components of the Theory Planned and Behavior, which consists of self-efficacy, peer influence, incentives and level of knowledge that represent as independent variables; meanwhile, compliance on zakat business behaviour is taken as dependent variable. This study is quantitative research by distributing questionnaires to Malay businesses registered from Malaysian Selangor Malay Chamber of Commerce (DPMMNS). Empirical findings from the analyses conducted by using SPSS indicate that self-efficacy, incentives and level of knowledge positively influence zakat business compliance behavior among SMEs. Meanwhile, peer influence indicates negative influence on zakat business compliance behavior among SMEs. Although business zakat is not a new knowledge for every Muslim needs to study, the collection of business zakat is still low compared to zakat on income based on a report published by Lembaga Zakat Selangor in 2022. The policymakers, zakat institutions need to take this matter seriously by paying more attention to these factors which become a reference in future to educate and develop new strategies to make SMEs pay business zakat, hence, increasing business zakat collections which can help other Muslims in need.