Corporate Zakat Theory

Theory is an idea to explain something as a guiding principle. In this study, there have a few theories that related with corporate zakat. The first theory is human capital theory. According to Becker (1975), he claimed that human capital theory is to estimate money rate by using of the theory of investment. For example, as state as Mohammad (2015), he stated that zakat is as the foundation to develop small business by mobilizing zakat as investment and consumption. The theory that suitable for zakat recipient is Becker’s human capital theory and Kirkpatrick’s training. These theories are to evaluate the taxonomy that has been proposed for the developing entrepreneurship by having universal application. The implications of model are for alleviating

As stated by Cartwright and Zander (1968), sociological theory is related to compliance behaviour which it known as reference group theory. They also claimed that they was introduced a sociological theory and they argues that an individual’s environment can be an influencing factor in compliance behaviour. According to the theory, individual is a member of a group will attempt to perpetuate a membership in the group by mimicking the behaviour of the existing members. For example, a case studies of zakat by Nur Azura et. al (2005), they revealed that social status and household size are significantly influenced on individuals in paying zakat income. The level of understanding, belief and faith will determine the individual’s decision to either follow or not to follow the group.

However, other researcher has other theory to reflect this corporate zakat which it is a greater fundamental of the Islamic principle which is self-control and self-judgement. Self-is the concept of Ihsan where Muslim believes that Allah knows all his deeds or even in his heart. Thus, it leads to the concept of self-judgment (muhasaba). Self- judgment is a continuous self-evaluations made by individuals before Allah evaluates his deeds. This is a process of reckoning of good and bad deeds through self-evaluation (Zaid,

It is a new development in accounting and auditing of zakat institutions regarding the zakat collected. Those days, Islamic government’s officers used three types of book, which were Daftar Al-Yawmi‟ah, Daftar Attawjihat and Daftar Attahwilat (Zaid, 2000). According to Al-Khwarizmi, Daftar Al-Yawmia‟ah refers to “the daily book used to record expenses and other financial transactions associated with Zakat Al-Kharaj” (Zaid, 2000). Daftar Attawjihat is a book of guidance. It was used to record budget expenses. It was also used to monitor regional expenses and to access the level of compliance on the budget allocations and specifications among the province. Meanwhile, Daftar Attahwilat was a book of transfers. It was used to record any transaction transferred between central government and the wilayah. Each wilayah will get the budget allocations approved by the central government. Budget allocations are based on the zakat collections, payments and transfers from or to the central government (Zaid,