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Lessons Learned from the Zakat and Waqaf Frameworks in Indonesia and Singapore for Application in Malaysia

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Islamic Social Finance

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Abstract

In this chapter makes a comparative analysis of the Zakat and Waqaf frameworks in Indonesia and Singapore, offering valuable insights for their application in Malaysia within the Islamic Social Finance context. The chapter provides an in-depth examination of the legal and regulatory frameworks governing Zakat and Waqaf in Indonesia and Singapore, shedding light on the respective practices in these jurisdictions. Through a meticulous comparison, the chapter aims to establish benchmarks, facilitating a nuanced understanding of the strengths and areas for improvement in each framework. By drawing lessons from the experiences of Indonesia and Singapore, the chapter presents a framework for Malaysia to enhance its Zakat and Waqaf systems, contributing to the broader field of Islamic Social Finance.

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Notes

  1. 1.

    Zain, N. R. M., & Ali, E. R. A. E. (2017). An analysis on Islamic social finance for protection and preservation of Maqāṣid Al-Sharia. Journal of Islamic Finance, 176(5872), 1–9.

  2. 2.

    The Royal Islamic Strategic Studies Centre [RISSC]. (2023). The Muslim 500: The World’s 500 Most Influential Muslims– 2023. Amman, Jordan: Author. Retrieved from https://themuslim500.com/wp-content/uploads/2023/10/The-Muslim-500-2024-Free.pdf.

  3. 3.

    Ibid.

  4. 4.

    Ibid.

  5. 5.

    Riyanto, S., Nizar, M., & Herningtyas, R. (2021). Muslim’s philanthropy in Singapore and the role of government. Sociología y tecnociencia, 11(2), 194–214.

  6. 6.

    Zain, N. R. M., & Ali, E. R. A. E. (2017).

  7. 7.

    Ibid.

  8. 8.

    Act of the Republic ff Indonesia No. 21 of 2008 concerning Sharia (Islamic) Banking.

  9. 9.

    Ibid, Article 4.

  10. 10.

    Widodo, A. (2019). The role of integrated Islamic commercial and social finance in reducing income inequality in Indonesia. Journal of Islamic Monetary Economics and Finance, 5(2), 263–286.

  11. 11.

    Ibid.

  12. 12.

    Government Regulation of The Republic Of Indonesia No. 14 of 2014 Regarding Implementation of Law No. 23 of 2011 Concerning the Management of Zakat Chapter 1, Article 1(3).

  13. 13.

    Ibid, Article 1(4).

  14. 14.

    Razak, D. A., & Dawami, Q. (2020).

  15. 15.

    Bin-Nashwan, S. A., Ismaiel, A. E. A., Muneeza, A., & Isa, M. Y. (2023). Adoption of ZakaTech in the time of COVID-19: cross-country and gender differences. Journal of Islamic Marketing.

  16. 16.

    Ibid.

  17. 17.

    Ibid.

  18. 18.

    Zubaidah, S., & Afifah, A. (2020, December). Development of zakat management digitalization in Indonesia. In Indonesian Conference of Zakat-Proceedings (pp. 459–468).

  19. 19.

    Ibid.

  20. 20.

    Bin-Nashwan, S. A., Ismaiel, A. E. A., Muneeza, A., & Isa, M. Y. (2023).

  21. 21.

    Syahbudi, M., & Moertiono, R. J. (2021, February). Zakatech: The Readiness of Islamic Economic Development in New Normal Era. In Proceeding International Seminar of Islamic Studies, Vol. 2, No. 1, pp. 314–323.

  22. 22.

    Budi, M. S. (2022). ZakaTech strategy in developing inclusive Islamic social finance (ISF) in Indonesia. At-tijaroh: Jurnal Ilmu Manajemen dan Bisnis Islam, 8(1), 35–45.

  23. 23.

    Al-Quran, 9:60.

  24. 24.

    Santo Hartono, H. (2022). Indonesia's National Zakat Agency (BAZNAS): digital transformation in managing zakat, infaq and shadaqah (ZIS). Muslim Business and Economic Review, 1(2), 183–204.

  25. 25.

    Ibid.

  26. 26.

    Zubaidah, S., & Afifah, A. (2020, December).

  27. 27.

    Ibid.

  28. 28.

    Ibid.

  29. 29.

    Lindsey, T. (2008). Constitutional reform in Indonesia: muddling towards democracy. In: Indonesia: Law and Society (pp. 23–47).

  30. 30.

    Article 47 of Republic of Indonesia Act No. 41 on Waqaf in 2004.

  31. 31.

    Manaf, Z. I. A., Mohamad, N. A., Ali, Z., Kadir, S. Z. S. A., & Nasir, F. M. (2017). Waqf Governance in Malaysia and Indonesia: a comparative analysis. In: Contemporary Issues on Zakat, Waqf and Islamic Philanthropy (pp. 219–228).

  32. 32.

    Ibid.

  33. 33.

    Presentation by Mohammad Nuh, Chairman of Badan Wakaf Indonesia ‘New Era: Waqaf Ecosystem Development in Indonesia’, Global Waqf Conference 2023, Istanbul Sabahattin Zaim University and Ibn Haldun University, 7–8 September 2023 Istanbul Turkey.

  34. 34.

    Ibid.

  35. 35.

    Ibid.

  36. 36.

    Ibid.

  37. 37.

    Ibid.

  38. 38.

    Ibid.

  39. 39.

    Ibid.

  40. 40.

    Further details on CWLS will be further explained in the Social Sukuk chapter.

  41. 41.

    Mufidah, K. (2022). Systematic Literature Review Cash Wakaf Linked Sukuk Tahun 2018–2022. https://dspace.uii.ac.id/handle/123456789/41824.

  42. 42.

    Mohammad Nuh, Chairman of Badan Wakaf Indonesia New Era: Waqf Ecosystem Development in Indonesia.

  43. 43.

    Ibid.

  44. 44.

    (Original Enactment: Act 27 of 1966) REVISED EDITION 2009.

  45. 45.

    Athief, F. H. N., Rachman, M. A., Rizki, D., Hakim, L., & Noh, M. S. B. M. (2022). Taxation policy and regulation efficiency on increasing zakat collection: countries comparison analysis. Journal of Islamic Accounting and Finance Research, 4(2), 301–326.

  46. 46.

    MUIS Annual Report 2022. https://www.muis.gov.sg/-/media/Files/Corporate-Site/Annual-Reports/Muis-Annual-Report-2022.ashx.

  47. 47.

    Ibid.

  48. 48.

    Riyanto, S., Nizar, M., & Herningtyas, R. (2021).

  49. 49.

    MUIS Annual Report 2022.

  50. 50.

    Riyanto, S., Nizar, M., & Herningtyas, R. (2021).

  51. 51.

    Ibid.

  52. 52.

    Pertiwi, R. S., Ryandono, M. N. H., & Rofiah, K. (2019). Regulations and management of waqf institutions in Indonesia and Singapore: a comparative study. KnE Social Sciences, 766–783.

  53. 53.

    Singapore Administration of Muslim Law Act 1966, section 64.

  54. 54.

    Abdul-Karim, S. (2010). Contemporary shari'ah structuring for the development and management of waqf assets in Singapore (Doctoral dissertation, Durham University).

  55. 55.

    Presentation by Mr. Masagoes Muhammad Isyak, Chief Executive Officer, Warees Investments, Singapore ‘Waqf Development and Management—The Singapore Experience’. In: Global Waqf Conference 2023, Istanbul Sabahattin Zaim University, and Ibn Haldun University 7–8 September 2023 Istanbul Turkey.

  56. 56.

    Ibid.

  57. 57.

    Ibid.

  58. 58.

    Abdul-Karim, S. (2010).

  59. 59.

    Mohammed Nasar, A. J., Hasan Saleh, A. O., Alhajri, F. M. F. S., & Taoufiq, E. A. Methods of Financing Waqf Development in Singapore. International Journal of Business Ethics and Governance, 3(1), 25–42.

  60. 60.

    Mr. Masagoes Muhammad Isyak, Chief Executive Officer, Warees Investments, Singapore ‘Waqf Development and Management—The Singapore Experience’.

  61. 61.

    Abdul-Karim, S. (2010).

  62. 62.

    Ibid.

  63. 63.

    Ibid.

  64. 64.

    Mr. Masagoes Muhammad Isyak, Chief Executive Officer, Warees Investments, Singapore ‘Waqf Development and Management—The Singapore Experience’.

  65. 65.

    Ibid.

  66. 66.

    Isyak, M. M. (2018). Enhancing community assets: sustaining the wakaf legacy. In: Fulfilling the Trust (pp. 165–177).

  67. 67.

    Ibid.

  68. 68.

    Majlis Ugama Islam Singapore, Asset Migration https://www.muis.gov.sg/officeofthemufti/Fatwa/Fatwa-on-Wakaf-Properties-English (accessed 16 November 2023).

  69. 69.

    Majlis Ugama Islam Singapore, Fatwa on Wakaf Properties. https://www.muis.gov.sg/officeofthemufti/Fatwa/Fatwa-on-Wakaf-Properties-English (accessed 22 November 2023).

  70. 70.

    Majlis Ugama Islam Singapore, Asset Migration.

  71. 71.

    Majlis Ugama Islam Singapura. https://www.muis.gov.sg/mosque/Mosque-Infrastructure/About-MBMF/About (accessed 22 November 2023).

  72. 72.

    Mr. Masagoes Muhammad Isyak, Chief Executive Officer, Warees Investments, Singapore ‘Waqf Development and Management—The Singapore Experience’.

  73. 73.

    Ibid.

  74. 74.

    Malaysia Federal Constitution, Article 74 (2) Ninth Schedule.

  75. 75.

    Official Portal of Department of Awqaf, Zakat and Hajj. (n.d.). Accessed November 20, 2023, from https://www.jawhar.gov.my/en/corporate-info/vision-mission-and-objective/.

  76. 76.

    Kamaruddin, M. I. H., Masruki, R., & Hanefah, M. M. (2018). Waqf management practices: case study in a Malaysian Waqf institution. World Journal of Social Sciences, 8(3), 1–12.

  77. 77.

    Salleh, M. C. M., & Chowdhury, M. A. M. (2020). Technological transformation in Malaysian zakat institutions. International Journal of Zakat, 5(3), 44–56.

  78. 78.

    Ibid.

  79. 79.

    Ibid.

  80. 80.

    Yahaya, M. H., & Ahmad, K. (2018). Financial inclusion through efficient zakat distribution for poverty alleviation in Malaysia: using fintech & mobile banking. Proceeding of the 5th International Conference on Management and Muamalah, pp. 15–31.

  81. 81.

    Nor, S. M., Abdul-Majid, M., & Esrati, S. N. (2021). The role of blockchain technology in enhancing Islamic social finance: the case of Zakat management in Malaysia. Foresight, 23(5), 509–527.

  82. 82.

    Ma’ruf, I. R., Jusuf, A. A., Al Jufri, R., Swastria, J., Supriadi, D., Rahayu, P. K., & Arifin, A. (2020). A comparative study on zakat management law practices between Malaysia and Indonesia. International Journal of Science and Society, 2(2), 328–341.

  83. 83.

    Waqf Governance in Malaysia and Indonesia: A Comparative Analysis Zati Ilham Abdul Manaf, Nor Asiah Mohamad, Zuraidah Ali, Sharifah Zubaidah Syed Abdul Kader & Fahmi M. Nasir. International Conference on Zakat, Waqf & Islamic Philanthropy ZAWFI’17, 13–14 December 2017.

  84. 84.

    Ibid.

  85. 85.

    Saad, N. M., Kassim, S., & Hamid, Z. (2013). Involvement of corporate entities in waqaf management: experiences of Malaysia and Singapore. Asian Economic and Financial Review, 3(6), 736.

Author information

Authors and Affiliations

  1. Faculty of Law, University of Malaya, Kuala Lumpur, Malaysia

    Sherin Kunhibava

  2. INCEIF, Kuala Lumpur, Malaysia

    Aishath Muneeza

  3. Faculty of Law, University of Malaya, Kuala Lumpur, Malaysia

    Maryam Binti Khalid

  4. Faculty of Law, University of Malaya, Kuala Lumpur, Malaysia

    Zakariya Mustapha

  5. Faculty of Law, University of Malaya, Kuala Lumpur, Malaysia

    Thong Ming Sen

Authors
  1. Sherin Kunhibava
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  2. Aishath Muneeza
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  4. Zakariya Mustapha
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  5. Thong Ming Sen
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Correspondence to Sherin Kunhibava .

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Kunhibava, S., Muneeza, A., Khalid, M.B., Mustapha, Z., Sen, T.M. (2024). Lessons Learned from the Zakat and Waqaf Frameworks in Indonesia and Singapore for Application in Malaysia. In: Islamic Social Finance. Springer, Singapore. https://doi.org/10.1007/978-981-97-1410-0_4

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