Moderating Effect of Perceived Behavioral Control on Islamic Tax (<i>Zakah</i>) Compliance Behavior among Businessmen in Yemen

et al. 2020

IJSSP

Self Cite

PurposeWith fundraising appeals for coronavirus disease 2019 (COVID-19) relief efforts and donating to those affected by its spread and impact, donors, volunteers and charities can all play their part and render much-needed support and aid. The purpose of this study is to be part of such effort by empirically examining the intrinsic and extrinsic motivations that drive people's attitudes to engage in fundraising campaigns launched in many communities, providing a richer understanding of donors' responses.Design/methodology/approachThe present work follows a quantitative approach based on an online survey conducted among potential Kuwaiti charitable donors. A total of 565 useable responses (356 females, 209 males) were obtained using snowball sampling and analyzed through smart partial least squares (SmartPLS) software.FindingsWith 90% of respondents financially able to donate who have a monthly income equal to or greater than the average (US$2000), this study confirms the suitability of the model used in predicting donors' attitudes to contribute online to grassroots fundraising campaigns. It reveals that all constructs included in the model (i.e. charitable projects geared for those affected by the pandemic, Internet technology (IT) features and religiosity level) are statistically significant, except for trust in charities.Practical implicationsThis study suggests that in uncertainty and concern surrounding COVID-19, nonprofit organizations, charities and governments should make concerted efforts toward mitigating the impacts of the pandemic on families and workers who are on the frontline against its outbreak. Possible areas need to be improved through suitable proactive strategies to solicit online monetary donations, such as charitable projects with inclusive information, focus attention on IT features (e.g. privacy, trustworthiness, security and effectiveness) and strengthen the religious faith of donors toward the significance of helping vulnerable groups and regions.Originality/valueThe research adds value to the literature on donation and giving behavior by offering an in-depth understanding of what influences online donation attitudes, especially amid such an unprecedented epidemic crisis.

Section: Theoretical Foundation and Hypothesis Developmentmentioning

confidence: 99%

Social solidarity amid the COVID-19 outbreak: fundraising campaigns and donors' attitudes

Bin-Nashwan¹,

Al-Daihani

et al. 2020

IJSSP

Self Cite

“…Behavioural perspectives have dominated most theoretical studies of Zakah compliance and its determinants, such as in Malaysia (Abdullah and Sapiei, 2018; Ali et al , 2017; Bakar and Rashid, 2010; Bidin et al , 2009), Indonesia (Heikal and Khaddafi, 2014; Huda et al , 2012), Saudi Arabia (Alosaimi, 2018), Yemen (Bin-Nashwan et al , 2020b), Nigeria (Saad and Farouk, 2019) and the Philippines (Andam and Osman, 2019). Therefore, the present study attempts to address the gap by proposing a viable and comprehensive compliance model that consolidates both socio-psychological and economic factors in a single framework.…”

Section: Zakah Practice In Muslim Countriesmentioning

confidence: 99%

“…It is evident that Zakah compliance remains consistently low and unsatisfactory in different Muslim-majority countries. Cases of such loss exist, for instance, in Malaysia (Abdullah and Sapiei, 2018); Saudi Arabia (Alosaimi, 2018); Yemen (Bin-Nashwan et al , 2020b); Pakistan (Hassan et al , 2019); Indonesia (Heikal and Khaddafi, 2014); and Nigeria (Saad and Farouk, 2019), as well as in Muslim-minority countries, such as the Philippines (Andam and Osman, 2019).…”

Section: Introductionmentioning

confidence: 99%

Zakah compliance in Muslim countries: an economic and socio-psychological perspective

Bin-Nashwan

Aziz

et al. 2020

JFRA

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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.

“…In modern economic discourse, wealth concentration and inequality have emerged as among the root attributes of financial crisis and instability that have plagued almost all Muslim communities. However, within the vibrant framework of the Islamic financial system, it could be possible to solve the dilemma of wealth concentration and ownership based on compliance with Shariah principles (Bin-Nashwan et al , 2021). The imposition of zakat is among the most important religious and socio-economic practices supporting the prevention of wealth concentration in a few hands (Tlemsani and Matthews, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…To date, most research into Zakat compliance has adopted behavioral frameworks, e.g. theory of reasoned action (TRA) (Bidin et al , 2009), theory of planned behavior (TPB) (Bin-Nashwan et al , 2021) and an extended TPB model (Andam and Osman, 2019). However, concern over the limitations of these behavioral models has been raised, especially over time and context as well as generalization of the findings (Bin-Nashwan et al , 2020b; Sniehotta et al , 2014).…”

Section: Introductionmentioning

confidence: 99%

Does trust in zakat institution enhance entrepreneurs’ zakat compliance?

Bin-Nashwan

Aziz

2021

JIABR

Self Cite

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.