TAX DEDUCTION THROUGH ZAKAT: AN EMPIRICAL INVESTIGATION ON MUSLIM IN MALAYSIA

Abdullah Al-Mamun, Ahasanul Haque

Abstract


The aim of this study is to explore the factors which are affecting Muslim consumer's perception towards tax deduction through zakat in Malaysia. A conceptual framework was drawn based on the literature. Six factors were extracted through principal component analysis and SEM was run to test the hypotheses. This research found that halal-haram aspect of Islamic Shariah has a very positive influence on Muslim consumers’ perception towards the tax rebate system. In addition, legal consciousness and knowledge about tax and zakat have a positive significant impact on Muslim consumers’ perceptions towards this system. Due to the limited literature available on this subject matter, this study offers unique findings that may help in capitalizing the practices in Muslim countries and to understand their consumers’ perception regarding the tax deduction system. In conclusion, zakat institutions in Malaysia will also be better benefitted through this research finding.
===========================================
Tujuan penelitian ini adalah untuk menggali faktor- faktor yang mempengaruhi persepsi para konsumen muslim terkait dengan pengurangan pajak melalui zakat di Malaysia. Suatu kerangka konseptual telah digambarkan berdasarkan literatur. Penelitian ini menemukan bahwa aspek halal- haram dalam Syariah Islami memiliki pengaruh yang sangat positif terhadap persepsi para konsumen muslim terkait dengan sistem pengurangan pajak. Sebagai tambahan, kesadaran hukum dan pengetahuan tentang pajak dan zakat memiliki pengaruh positif yang signifikan pada persepsi konsumen muslim yang terkait dengan sistem ini. Sehubungan dengan terbatasnya literatur yang tersedia terkait dengan masalah ini, penelitian ini menawarkan temuan- temuan yang menarik yang dapat mendukung pengembangan praktik- praktik di negara- negara muslim dan untuk memahami persepsi para konsumennya terkait dengan sistem pengurangan pajak.

Keywords


Muslim Consumer; Perception; Tax deduction through Zakat

Full Text:

PDF

References


Alam, S. S., ; Mohd, R. ; Hisham, B. (2011). Is religiosity an important determinant on Muslim consumer behaviour in Malaysia. Journal of Islamic Marketing, pp. 2(1), 83-96.

Alliance, IHI. (2009). International Halal Integrity Alliance. Kuala Lumpur: MY, s.n.

Anir, N. A., ; Nizam, M. D. N. M. H., ; Masliyana, A. (2008). The users perceptions and opportunities in Malaysia in introducing RFID system for halal food tracking. WSEAS Transactions on Information Science and Applications, pp. 5(5), 843-852.

Anon. (2005). IslamOnline.net Retrieved from http://www.islamonline.net/English/News/2005-02/21/article04.shtml

Anuar, M., Adam, F., & Mohamad, Z. (2012). Muslim Consumers’ Perception on Internet Banking Services. International Journal of Business and Social Science, 3(5), 63–72.

Azmi, S. H. (1991). Traditional Islamic Welfare: Its meaning, history and contemporary relevance The Islamic Quarterly, Volume 35(3).

Bahrudin, S.S.M., Illyas, M.I. , & Desa, M.I. (2011). Tracking and tracing technology for halal product integrity over the supply chain Bandung. Indonesia: s.n.

Berger, M.S. (2011). Religion in the public space: the case of Europe. Malaysia: Kuala Lumpur.

Bonne, K, & Verbeke, W. (2008). Religious values informing halal meat production and the control and delivery of halal credence quality. Agriculture and Human Values, vol 25(1), 35-47.

Bonner, S., Davis, J., & & Jackson, B. (1992). Expertise in corporate tax planning: the issue identification stage. Journal of Accounting Research. Expertise in corporate tax planning: the issue identification stage.(the issue identification stage. Journal of Accounting Research), 1-28.

Ceranic, S., & Bozinovic, N. (2009). Possibilities and significance of HAS implementation (halal assurance system) in existing quality system in food industry. Journal Biotechnology in Animal Husbandry, 261-266.

Choi, B. , & Jong, A. M. (2010). Assessing the impact of knowledge management strategies announcements on the market value of firm. (Information & Management), 42-52.

Connolly, S. , & Munro, A. (1999). Economics of the Public Sector. England: Prentice Hal.

Cooper, D. (1995). Local government legal consciousness in the shadow of juridification. Journal of Law and Society, 22(4), 506-526.

Cowan, D. (2004). Legal consciousness: some observations. Modern Law Review, 7(6), 928-958.

Darrock, J., Miles, M. P., & Buisson, T. (2005). Patenting strategy of entrepreneurial oriented ï¬rms in New Zealand. The International Entrepreneurship and Management Journal, 45.

Delener, N. (1990). The effects of religious factors on perceived risk in durable goods purchase decisions. Journal of Consumer Marketing, 7(3), 27-38.

Delener, N. (1994). Religious contrasts in consumer decision behaviour patterns: their dimensions and marketing implications. European Journal of Marketing, 28(5), 36-53.

Doi, A.R.I. (1984). Shariah: The Islamic Law. A.S. Doordeen. London: s.n.

Esso, N. , & Dibb, S. (2004). Religious influence on shopping behaviour: an exploratory study. Journal of Marketing Management, 20(7), 683-712.

Ewick, P. , & Silbey, S.S. (1992). Conformity, Contestation, and Resistance: An Account of Legal Consciousness Retrieved from England

Ewick, P.; , & Silbey, S.S. (1998). The Common Place of Law: Stories from Everyday Life. s.l. Amerika Serikat: Chicago Series in Law and Society.

Fam, K. S., Waller, D. S., , & Erdogan, B. Z. (2004). The influence of religion on attitudes towards the advertising of controversial products. European Journal of Marketing, 20(1), 19-41.

Friedman, L. (1989). Law, Lawyers, and Popular Culture. The Yale Law Journal, 1579-1606.

Galligan, D. (2006). Law in Modern Society. UK: Oxford University Press.

Gies, L. (2003). Explaining the absence of the media in stories of law and legal consciousness. Entertainment Law, 21-19.

Gilligan, G., & Richardson, G. (2005). Perceptions of Tax Fairness and Tax Compliance in Australia and Hong Kong†A Preliminary Study. Journal of Financial Crime, 1-13.

Grant, R.M. (1996). Prospering in dynamically competitive environments: organizational capability as knowledge integration. Organization Science, 7(4), 375-387.

Hanazaee, K., Attar, M. M., & Alikhan, F. (2011). Investigating the effect of gender role attitude on the relationship between dimensions of religiosity and new product adoption intention. World Applied Sciences Journal, -, 1527-1536.

Hanazaee, K. H., & Ramezani, M. R. (2011). Intention to halal products in the world markets. Interdisciplinary Journal of Contemporary Research in Business. Interdisciplinary Journal of Contemporary Research in Business, 1(5), 1-7.

Hanno, D., & Violette, G. (1996). An Analysis of moral and social influences on taxpayer behavior. Behavioral Reasearch in Accounting, 57-75.

Hanson, J. L. (1972). A Textbook of Economics (6th ed.). London: MacDonalds and Evans.

Havinga, T. (2011). On the borderline between state law and religious law. Wageningen: Wageningen Academic Publisher.

Hegde, D., & Shapira, P. (2007). Knowledge, technology, tra- jectories and innovation in a developing country context, evidence from a survey of Malaysian ï¬rms. International Journal of Technology Management, 349-370.

Hertogh, M. (2004). A European Conception of Legal Consciousness: Rediscovering Eugen Ehrlich. Journal of Law and Society, 457-461.

Hoffmann, E. (2003). Legal Consciousness and Dispute Resolution: Different Disputing Behavior at Two Similar Taxicab Companies. Law & Social Inquiry, pp. 28(1), 691-694.

Ibrahim, Azharsyah. (2011). Maksimalisasi Zakat Sebagai Salah Satu Komponen Fiskal Dalam Sistem Ekonomi Islam. JURISPRUDENSI: Jurnal Syariah, 3(1), 1-20.

Jackson, B. R., & Milliron, V. C. (1986). Tax Compliance Research. Journal of Accounting Literature, 125-142.

JAKIM. (2011). Halal Definition. [Online] Available at: http://www.halal.gov.my/v3/index.php/en/about-halal-certification/halal-definition.

Jaremba, U. (2013). At the Crossroads of National and European Union Law. Erasmus Law Review, 191-203.

Kahf, M. (1997). Potential Effects of Zakat on Government Budget. IIUM Journal of Economics and Management, 85.

Kamali, M. (2003). Adoption of text messaging services. Cambridge: Islamic Texts Society.

Kamali, M.H. (2010). The halal industry from a Shariah perspective. Islam and Civilisational Renewal, 1 No. 4 595-612.

Khan, M. F. (2007). Integrating Faith-based Institutions (Zakah and Awqaf) in Poverty Reductions Strategies (PRS). . Islamic Research and Training Instiute (IRTI), 31.

Khraim, H. (2010). Measuring religiosity in consumer research from an Islamic perspective. Journal of Economic and Administrative Sciences, -, 52-78.

Kogut, B. , & Zander, U. (1992). Knowledge of the ï¬rm, combinative capabilities, and the replication of technology. Organization Science, Vol. 3 No. 3, 383.

Kogut, B. , & Zander, U. (1993). Knowledge of the ï¬rm and the evolutionary theory of the multinational corporation Journal of International Business Studies, Vol. 4, 45- 625.

Kotler, P., Kartajaya, H. , & Setiawan, I. (2010). Marketing 3.0: From Products to Customers to the Human Spirit New York: NY: s.n.

Laldin, M. (2006). Islamic Law – An Introduction. Malaysia: Kuala Lumpur.

Liao, S., Fei, W. , & Chen, C. (2007). Knowledge sharing, absorptive capacity, and innovation capability: An empirical study of Taiwan’s knowledge-intensive indus- tries. Journal of Information Science, 340-359.

Marshall, A. M. (2003). Injustice frames, legality and the everyday construction of sexual harassment 659-689.

Marshall, A. M. , & Barclay, S. (2003). In their own words: how ordinary people construct the legal world Law and Social Inquiry, 616-628.

McDaniel, S. W. , & Burnett, J. J. (1990). Consumer religiosity and retail store evaluative criteria. . Journal of the Academy of Marketing Science, 101-112.

Merry, S. E. (1990). Getting Justice and Getting Even: Legal Consciousness among Working-Class Americans Chicago: The University of Chicago Press.

Mikesell, J. (2003). Fiscal Administration: Analysis and Applications California: Wadsworth Publishers.

Mokhlis, S. (2009). Relevancy and measurement of religiosity in consumer behavior research. International Business Research, pp. 2(3), 75-84.

Muhammad, A. (1980). A note on the concept of zakah and taxation. In M.R. Zaman (Ed.), Some Aspects of the Economics of Zakah (pp. 69-79). Indianapolis, USA: American Trust Publications.

Mukhtar, A. , & Butt, M. M. (2012). Intention to choose halal products: the role of the religiosity. Journal of Islamic Marketing. Journal of Islamic Marketing, pp. 3(2), 108-120.

Mustafa Afifi, A. , & Mohd Mahyeddin, M. (2012). The Possibility of Uniformity on Halal Standards in Organization of Islamic Countries (OIC Country). World Applied Science Journal, 6-10.

Nestle. (2009). Nestle and halal.

Nielsen, L. B. (2000 ). Situating legal consciousness: experience and attitudes of ordinary citizens about law and street harassment. Law and Society Review, 34, 1055-1090.

Norazlina, A. W., & Abdul Rahim, A. R. (2012). Efficiency of Zakat Institutions in Malaysia: An Application of Data Envelopment Analysis. Journal of Economic Cooperation and Development, 33-112.

Norman, A., Nasir, M., Fauzi, S. , & Azmi, M. (2009). Consumer acceptance of RFID-enabled services in validating halal status. s.l., s.n.,, 11-15.

Norulazidah P.H. Omar Ali, D. H., & Myles, Gareth D. (2010). The Consequences of Zakat for Capital Accumulation. Journal of Public Economic Theory, 12(4), 837-856. doi:10.1111/j.1467-9779.2010.01476.x

Nur Barizah, A. B. , & Abdul Rahim, A. R. (2007). A Comparative study of zakah and modern taxation. J.KAU: Islamic Econ.

Nur Barizah, A. B. , & Hafiz Majdi, A. R. (2010). Motivations of paying zakat on income: Evidence from Malaysia. International Journal of Economics and Finance, 76-85.

Nur Barizah, A. B., Abdul Rahim, A. R. , & Hafiz Majsi, A. R. (2005). Motivations of paying zakat on income. Kuala Lumpur: s.n.

O'Donnell, Ed, Koch, Bruce, & Boone, Jeff. (2005). The influence of domain knowledge and task complexity on tax professionals' compliance recommendations. Accounting, Organizations and Society, 30(2), 145-165. doi:http://dx.doi.org/10.1016/j.aos.2003.12.003

Oxley, P. (1993). Women and Paying Tax Wellington: Institute of Policy Studies.

Palacios, D., Gil, I , & Garrigos, F. (2008). The impact of knowledge management on innovation and entrepreneurship in the biotechnology and telecommunications industries. . Small Business Economics, 291-301.

Pointing, J., Teinaz, Y. , & Shaï¬, S. (2008). Comment: illegal labelling and sales of halal meat and food products. The Journal of Criminal Law, Vol. 72 No. 3, 206-213.

Ranft, A. , & Lord, M. (2002.). Acquiring new technologies and capabilities: A grounded model of acquisition and imple- mentation. Organization Science, 420-441.

Rehman, A., & Shabbir, M. S. (2010). The relationship between religiosity and new product adoption. . Journal of Islamic Marketing, 63-69.

Riaz, M. N. , & Chaudry, M. M. (2004 ). Halal food production. Boca Raton: CRC Press LCC.

Richardson, M. , & Sawyer, A. J. (2001). A Taxonomy of the Tax Compliance Literature: Further Findings Problems and Prospects Australian Tax Forum, 137-149.

Sabiq, S. (1991). Fiqh us-Sunnah: Az-Zakah and As-Siyam Washington: American Trust Publications.

Salman, F. , & Siddiqui, K. (2011). An exploratory study for measuring consumer's awareness and perceptions towards halal food in Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 639-652.

Sarat, A. (1990). The law is all over: power, resistance, and the legal consciousness of the welfare poor. Yale Journal of Law and the Humanities, 343-379.

Shariff, A. , & Jusoh, W. (2011). A robust zakah system: Towards a progressive socio-economic development in Malaysia Middle-East Journal of Scientific Research, 550-554.

Shaw, D. , & Edwards, J. S. (2005). Building user commitment to implementing a knowledge management strategy. Information and Management, 977-988.

Sherman, D., Berkowitz, D. , & Souder, W. (2005 ). New product development performance and the interaction of cross-functional integration and knowledge management. Journal of Product Innovation Management, 399-411.

Singh, M. F. (2001 ). Honest Living ( 4th ed.). India: Radha Soami.

Smith, K. W. (1992 ). Reciprocity and Fairness: Positive Incentives for Tax Compliance Why People Pay Taxes Michigan University of Michigan Press.

Sun, S., Goh, T.,, Fam, K. S. , & Xue, Y. . (2012). The influence of religion on Islamic mobile phone banking services adoption. Journal of Islamic Marketing, 81-98.

Wahid, H. , & R.A. Kader. (2010). Localization of Malaysian zakat distribution: Perceptions of amil and zakat recipients. zakat and wakaf economy,, 4.

Wilkes, R. E., Burnett, J. J., & Howell, R. D. (1986 ). On the meaning and measurement of religiosity in consumer research. Journal of Academy of Marketing Science,, 47-56.

Wilson, J, & Liu, J. (2010). Shaping the halal into a brand. Journal of Islamic Marketing, Vol. 1 No. 2 107-123.

Yusuf, M. , & Derus, A. M. (2013). Measurement model of corporate zakat collection in Malaysia: A test of diffusion of innovation theory Humanomics, 61-74.

Zaim, S. (1989). Recent Interpretations on Economic Aspect of Zakah. Jeddah: IRTI/IDB

Zakaria, N. , & Abdul-Talib, S. (2010 ). Applying Islamic maket-ortiented cultural model to sensitize strategies towards global customers, competitors, and environment. Journal of Islamic Marketing, Vol. 1 No. 1, 51-62.

Zakaria, Z. (2008). Tapping into the world halal market: some discussions on Malaysian laws and standards Shariah Journa,, Vol. 16, 606-616.

Ziegler, P. . (2007). Germany still a developing country? The halal label booms in the world market Fleischwirtschaft, 29-32.

Zollo, M. , & Winter, S. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 339-351.




DOI: http://dx.doi.org/10.22373/share.v4i2.1027

Copyright (c) 2015 SHARE Jurnal Ekonomi dan Keuangan Islam

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Welcome to Share Journal of Islamic Economics and Finance Open Journal System. Thank you very much for Visiting.