Purpose As one of the constituted main pillars of Islam, Zakah compliance (ZC) is mandated upon Muslims from all studies of life. Taking the disappointingly low compliance level in developing countries, including Yemen, as its backdrop, the purpose of this study is to investigate ZC behavior among entrepreneurs, drawing on the economic approach perspective. Design/methodology/approach The study adopted a cross-sectional design based on a survey of entrepreneurs in Yemen. It used primary data collected via self-administered questionnaires, involving a sample of 500 participants. A variance-based structural modeling equation-partial least squares were used to measure the instruments and assess the hypothesized relationships. Findings The findings affirmed the suitability of the economic factors approaches in the context of ZC in a developing country. Specifically, the study demonstrated that Zakah law complexity has a significant negative influence on ZC of entrepreneurs. It also found a significant positive relationship between religiosity and ZC among the study sample, whereas the study revealed that law enforcement has no influence on compliance behavior. Practical implications Policies and programs focused on Zakah laws and regulations could be formulated to make them less complex and simpler for acceptable levels of ZC. The result is further relevant to policymakers in Muslim communities to strengthen the religious faith of Zakah payers toward compliance with one of the fundamental religious obligations such as Zakah. Originality/value This study enriches the limited previous studies on actual ZC from the perspective of developing communities, especially Yemen. Most importantly, the value was added to the limited literature internationally from an economic aspect.

PurposeTo provide a sound understanding of Zakah compliance behaviour, this paper aims to shed light on the relationships between Zakah system fairness, Zakah morale, peer influence and law enforcement with Zakah compliance behaviour among entrepreneurs.Design/methodology/approachThe underpinning model used in this paper is the socio-economic theory of regulatory compliance for assessing the probable determinants shaping Zakah payers' compliance behaviour. Based on a survey of active entrepreneurs in a typical Islamic situation like Yemen, a total of 500 self-administered instruments were distributed to the respondents. Partial least squares-structural equation modelling (PLS-SEM) was used to estimate the compliance model.FindingsAll the variables included in the compliance model are statistically significant, except for law enforcement. Zakah compliance of entrepreneurs is significantly influenced by Zakah system fairness, Zakah morale and peer influence.Practical implicationsZakah institutions and agencies in Muslim-majority countries may use the results of this work to focus attention on appropriate proactive policies to formulate a fair Zakah system, inculcating moral responsibility among Zakah payers, embarking on sensitisation programmes in society as a whole, and being more proactive in educating Muslims in the importance of paying Zakah to the respective Zakah agencies.Originality/valueThis paper complements the limited literature on Zakah by examining both tangible and intangible motivations affecting Zakah payers' compliance decision.

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Purpose Although zakat is a principal way to redistribute wealth, a unique practice designed to achieve a sustainable Islamic economic and social system, zakat institutions and agencies in most Muslim countries still suffer from the perplexing issue of low zakat collections, ascribing this to the level of compliance among zakat payers. To provide more insight into this lacuna, this study aims to examine the role of trust in zakat institution through the relationship between socio-economic determinants (i.e. religiosity, moral reasoning, peer influence and system fairness) and zakat compliance decisions. Design/methodology/approach From a typical Islamic country, Yemen, a random sample of 274 entrepreneurs was drawn for a self-administered survey. To estimate and analyze the compliance model, SmartPLS structural equation modeling was used. Findings The results show that all hypothesized direct relationships are supported. Importantly, the trust-moderated interactions of religiosity, moral reasoning and peer influence on zakat compliance are significant, although its interaction with zakat system fairness is not. Practical implications The results should be helpful for policymakers and responsible institutions in Muslim communities to understand how different levels of trust can play an important role in Zakat payers’ compliance to boost or erode zakat funds. This research also contributes important inferences for managers about the necessity of inculcating religious and moral values among zakat payers, formulating a fair system and embarking on sensitization programs in society. Originality/value The research enriches the scanty literature by validating a viable compliance model drawing on the socio-economic theory of regulatory compliance. Moreover, the model integrates the moderating role of trust in socio-economic perspectives of zakat compliance.

Purpose Although Zakah is the cornerstone of the social protection system in Muslim societies, providing relief to those in need and collecting funds from those who have access to money and property, many administrative and legal improvements need to be made to ensure that Zakah funds are managed effectively and efficiently in Muslim states. It is therefore important to recognize why some Muslims are not paying their Zakah through Zakah authorities. The purpose of this paper is to propose a viable and comprehensive research model, derived from an economic and socio-psychological perspective, to provide a richer understanding of Zakah payers’ compliance behaviour. Design/methodology/approach Drawing on extant literature, this study offers a conceptual framework for a better understanding of compliance behaviour by proposing an economic and socio-psychological model based on Fischer’s tax compliance model, which could be applied cautiously in an Islamic setting like Zakah. Findings The four main categories of the Fischer model are derived from socio-psychological and economic perspectives, namely, attitude and perception (system fairness, ethics and peer influence); Zakah system structure (Zakah law complexity and law enforcement); non-compliance opportunity (education level, wealth source and occupation); and demographic factors (age and gender). Each has much to offer in understanding Zakah payers’ compliance decisions. To suit the nature of Zakah, the influence of Islamic religiosity and the moderating effect of trust in the Zakah institution are incorporated into the model. Practical implications Those Muslim communities that strive to have functional Zakah systems to search for solutions to the perennial problem of low Zakah funding and its damning consequences, are offered a compliance model for systematically assessing Muslims’ compliance behaviour with Zakah provisions. This framework is anticipated to offer invaluable input to policymakers in streaming and strategizing the minimization of losses of Zakah revenue to Zakah authorities. Originality/value Although behavioural models such as the theory of reasoned action and the theory of planned behaviour have been extensively used in Zakah compliance studies, to the best of the authors’ knowledge, this study is perhaps the first to apply a socio-psychological and economic framework, emerging from tax literature, in the Zakah environment to develop fully understanding of Zakah payers’ compliance decisions.