Zakat as a poverty reduction mechanism among muslim community in Malaysia / Nor Safarina Lamat

Zakat is an old institution that was first established by the Prophet Muhammad S.A. W. as the third pillar of Islam (Theodossiou, 2015). In Malaysia, zakat act as one of the essential economic role in reducing poverty, whereby every zakat institutions from every state provide and invented particular schemes and aids given to eight disadvantages group of community in Malaysia. Basically, zakat system can be divided into two, which are zakat collection and zakat distribution. Both zakat collection and zakat distribution are very essential in implementing programmes to reduce poverty. Zakat fund should be collected and distributed to the right recipients or asnafs as it always shows the ability of the zakat institutions in managing the fund. The purpose of this study is to determine the relationships between zakat collection, zakat distribution, GDP Per Capita and poverty incidence. This research employs quantitative method of Multiple Linear Regression and detailed analysis of the relevant literature. The finding of this study would provide useful information to the Muslim community, zakat institutions and even the Government of Malaysia. This study will precisely measure on the relation of zakat imposed towards level of poverty in Malaysia and it is proven that zakat act as one of the mechanism that can be used as a parameter in alleviate poverty in 14 states in Malaysia through their efforts in varieties types of schemes and aids invented.