23 of 2011, The National Board of Zakat (BAZNAS) is entrusted to manage zakat in the national scale. Ten years following the ratification of Zakat Law, there has been advancement in Indonesia’s zakat ecosystem.
LIST OF TABLES
INTRODUCTION
THE ROLE OF ZAKAT IN TIMES OF COVID-19 PANDEMIC
INDONESIA’S ZAKAT POTENTIAL IN 2020
Total potential of zakat Rp327.6 trillion
The transactions of Sharia stocks in Indonesia Stock Exchange (BEI) each period during the past five years increased to 7%, which consists of 11 industry categories (Puskas BAZNAS, 2020). As the explanation above, it is concluded that the potential of zakat in Indonesia is promising.
REVIEW OF 2020 ZAKAT
INDONESIA’S ZAKAT ADMINISTRATION IN
Zakat Management Performance of 2020
PERBAZNAS is a regulation ratified by the Republic of Indonesia’s Ministry of Law and Human Rights (Kemenkumham Republik Indonesia) and is regulatory and binding by nature towards all BAZNAS and LAZ in Indonesia. This measuring tool was developed under the partnership between Puskas BAZNAS and the Republic of Indonesia’s Ministry of Religious Affairs (Kemenag RI).
BAZNAS Leadership
The transition of zakat management constitution from the Law No. 23 of 2011 brought substantial changes in national zakat. The second reason is that the Law No. 23 of 2011 instructed the integration of zakat management between BAZNAS and LAZ with BAZNAS acting as the coordinator.
Innovations in Zakat Management
The inclusive zakat campaign is defined as creating digital content or virtual events that could be accessed by everyone. This scholarship partners with several leading universities in Indonesia and other countries, such as Al.
Zakat in COVID-19 Pandemic
This also happened during the other crises, such as Aceh tsunami disaster in 2004 and COVID-19. The high positive and negative influences of COVID-19 on zakat ultimately could be measured by the amount of zakat funds collected during the pandemic. BAZNAS specifically has two zakat distribution strategies during the COVID-19 pandemic, i.e., specific distribution programs, and programs to secure the preexisting programs.
From all of the programs implemented by BAZNAS, Puskas (2020) made a survey on public perception on BAZNAS in handling COVID-19. COVID-19 pandemic has to be perceived as an opportunity for OPZs to attain public trust.
ZAKAT
STATISTICS AND THE PROJECTION
THE PROJECTION OF ZAKAT IN 2021
Statistics of National Zakat in 2019
National zakat collection is the total of funds collected by various OPZs in Indonesia in a year. The number was lower compared to the previous year, which amounted Rp 500 million, or 6 percent of the total collection. This value had been higher in the previous year, with Rp114 million or 1,4 percent from the total national collection.
The education field had the proportion of 19,3 percent from the total distribution, or as much as Rp1,2 billion. Regency/City-level BAZNAS collected fund as much as Rp3,5 trillion or 34 percent from the total collection and distributed Rp2,5 trillion or 29,77 percent of the total distribution.
Growth Prospect of Zakat in 2021
In general, the projection of zakat in 2021 using the forecast method varies, as described in Figure 3.1 and Figure 3.2. With the geometric curve method, muzakki and munfiq growth in 2021 is projected to be at 9,443,424 individuals. By using opinion assumption method as explained in the previous section, we could project zakat collection in 2021 with the following notes.
Projection of the number of beneficiaries with this method produce an amount of individuals in 2021. Additionally, this method also predicts the the number of muzakki and munfiq to be at 9,443,424 individuals in 2021.
RESEARCH-BASED NATIONAL ZAKAT
IMPACT OF ZAKAT DISTRIBUTION ON POVERTY ALLEVIATION
BAZNAS
IndonesiaMunicipal
IZN-Based Zakat Management Performance
Regulations got the score 1,00 (Very Good), which could be subjected to the government who issued a regulation in the form of UU No. The last variable is the ratio of business entity muzakki to the total number of business entities in BAZNAS. The second variable, management, has the score of 1,00, which is attributed to the fact that BAZNAS already has.
This is due to the fact that the allocation to collection ratio (ACR) score exceeded 90%. According to the calculation, it could be seen that the highest IZN for National LAZ was attained by LAZ Inisiatif Zakat Indonesia with the score 0,87 (Very Good), for Provincial LAZ was attained by LAZ Nurul Fikri with the score 0,68 (Good), and for Regency/City LAZ was attained by LAZ Cilacap with the score 0,74 (Good).
Zakat Literacy Index Measurement Results
Zakat Obligation Literacy Zakat Beneficiaries Literacy Zakat Calculation Literacy Zakat Objects Literacy Zakat Institution Literacy Zakat Regulation Literacy Zakat Programs Literacy Zakat Impact Literacy Zakat Digital Payment Literacy. Moreover, the ILZ measurement found that there were 5 provinces categorized as low literacy, which are South Sulawesi with the score 57,90, West Kalimantan with the score 57,57, North Maluku with the score 55,99, DKI Jakarta with the score 54,60, and the lowest being Zakat Literacy Index Score based on provinces in 2020. Moreover, the study also recorded the factors that drove respondents in deciding their zakat payment channel.
The majority of respondents (50 percent) considered accessibility or practicality factor in choosing their zakat payment channel. This finding shows that muzakki tend to pay zakat with the channel that is easiest, closer to their location, and accessible.
Results of OPZs’ Sharia Compliance Index Measurement (IKSOPZ)
According to the diagrams above, the Sharia Compliance Index average for National LAZ was 0,75 and categorized as Good with A predicate. The average score for Provincial BAZNASs and Regency/City-level LAZs were 0,63 each and categorized as Good with A predicate. Lastly, the last OPZ group, Regency/City-level BAZNAS got the average score of 0,55 and categorized as Moderately Good with B predicate.
According to the data above, the highest IKSOPZ score was attained by Aceh Province, with the average of 0,73 and categorized as Good with A predicate. The other provinces with IKSOPZ score categorized as Good with A predicate were West Kalimantan, Riau Island,.
Zakat and Poverty Mapping
In DI Yogyakarta Province, Bantul Regency was the area with the highest number of registered mustahiq. Jakarta Selatan City was the area with the highest registered mustahiq with 10,000 individuals, contributing 29% of the total mustahiq in Jakarta. In East Timur, Tuban Regency was the area with the highest number of registered mustahiq.
As for muzakki, Malang Regency was the area with the highest number of muzakki, contributing 14,6% of total muzakki in East Java with 11.000 individuals. West Bandung Regency was the area with the highest number of mustahiq in West Jawa, with 153.000 individuals or 21% of the total mustahiq in West Jawa.
Financial Ratio Mapping of OPZs
Growth Ratio is the ratio that represents the growth of ZIS funds collection by OPZs from the preceding years. The OPZ Growth Ratio encompasses 6 ratios, i.e., Growth of Zakat, Growth of Infaq/Shadaqah, Growth of ZIS, Growth of Allocation, and Growth of Operational Expense. The ZIS Growth Ratio is used to grade OPZs’ ability in increasing ZIS funds accumulated from the preceding years.
Growth of Zakat Ratio and Growth of Infaq/Shadaqah’s calculations yielded the Moderately Good result with zakat growth reaching 17,65 percent and infaq/shadaqah reaching 19,94 percent in 2018, leading the average Growth of ZIS to reach 18,57 percent. The distribution growth ratio’s calculation in OPZs in 2018 yielded the result of 25,44 percent, which could be interpreted as that growth of ZIS funds distribution by OPZs in Indonesia is categorized as Good.
Measurement Result of Zakat Management Organiza- tion Transparency Index
According to the calculation done in national scale, the average score of OPZ I-Trans is 0,58, putting it in Moderately Transparent category. From the explanation above, we could conclude that in national scale OPZs in Indonesia have the transparency level in Moderately Transparent category in zakat management. According to the data, the highest OPZ I-Trans score was attained by North Kalimantan with average of 0,73 and categorized as Transparent.
The other provinces in the same category are Riau, Riau Island, South Sulawesi, Banten, East Jawa, South Kalimantan, East Kalimantan, Lampung, Jambi, Central Jawa, Bali, and West Sumatera. Lastly, the remaining provinces, West Sulawesi, Papua, and South Maluku are in Less Transparent category.
Mapping of Zakat Core Principles Implementation
In formulating ZCP Implementation Index, this study used Mixed Methods procedure, where quantitative and qualitative data collections and analyses were integrated. From Desk Study, this study obtained references on index measurement and other important points related to zakat, such as Sharia, legal, and management principles so that each component in ZCP Implementation Index could be justified scientifically. From the FGD with LAZs and BAZNASs, this study obtained better perspective on what had happened on field and the challenges, so the selected indicators and variables could validly represent the needs of LAZs and BAZNASs.
Multi-Stage Weighted Index method was done in drafting ZCP Implementation Index components, which are divided into three levels: dimensions, indicators, and variables. There are six dimensions and fourteen variables in ZCP Implementation Index, as described in Table 4.6.
CHALLENGES AND OPPORTUNITIES
CHALLENGES AND OPPORTUNITIES
Zakat Digitalization
First, the awareness of zakat obligations, which could be improved with technology utilization by making mass delivery of messages on zakat obligations possible in certain forms easily digestible by muzakki. The second area is collection of zakat, which could be make simpler so that muzakki could face less difficulties in paying their zakat. Distribution reports could be improved so that people could understand how the funds they contributed to are distributed.
Considering that the implementation would revolutionize zakat management, major impacts could be seen in various aspects, such as roles of amil, zakat server data, increase in bound zakat (zakat muqayyadah), etc. With said regulation, it is expected that blockchain implementation in zakat could be accelerated to boost zakat management performance in Indonesia.
Millenial Generation, Demography Bonus and Eco- nomic Recession
Looking at the data, the projection of Indonesia’s citizens in 2015-2045 stated that Indonesia would reach the peak of demography bonus in 2021-2022. In national scale, Indonesia enters the demography bonus era since 2012 and is predicted to end in 2037. The COVID-19 pandemic which struck Indonesia in March 2020 made Indonesia’s hope to reach demography bonus more difficult.
The spike in unemployment, which is taking place in the vicinity of demography bonus’ peak is a huge challenge to Indonesia’s economy. Even so, muzakki’s chance of increasing in this demography bonus is still there if followed by attempts by multisectoral stakeholders in maximizing demography bonus.
BAZNAS Strategic Plan
The amount of unemployment consists of 10 million of independent workers and 15 million of freelancers or family workers. Abundant supply of productive labors could not be employed nor build their own businesses due to COVID-19 pandemic. COVID-19 impacts which skyrocketed new poverty, in one hand, could reduce zakat collection, which means that demand on zakat would increase, while zakat potential sources, or the supply, would decrease.
Indonesia Zakat Outlook predicts that there would be six points in BAZNAS’s 2020-2025 Renstra, i.e., the amendment of Law No. 23 of 2011 on Zakat Management, advocation of tax credit in zakat payment, advocation of Presidential Decree (Perpres) issuing on zakat obligations for civil servants (ASN), Puskas BAZNAS’s contribution enforcement, technology infrastructure enforcement in zakat management, enforcement of coordination with other government institutions, and formation of Sharia Supervisory Board (DPS) in BAZNAS.
BAZNAS Strategic Plan
Therefore, Zakat Outlook encourages BAZNAS to reinstate tax credit advocation on zakat payment in BAZNAS’s Renstra, so that zakat collection in the following five years could be further optimized. Because of that, Indonesia Zakat Outlook predicts in BAZNAS’s 2020-2025 Renstra that enforcement of Puskas BAZNAS would be one of the priorities. Perfecting of this technology would certainly be one of the main focuses on zakat management in the following years.
Because of that, income zakat’s potential is one of the relevant objects of contemporary zakat to be realized (Puskas BAZNAS, 2019). Because of that, one of the attempts to strengthen the regulation aspects is to change the voluntary nature to mandatory.
Diakses melalui https://www.cafonline.org/about-us/publications/2018- publications/caf-world-giving-index-2018 pada 20 November 2020. Diakses melalui https://forumzakat.org/crisis-center- Covid-19-berikut-layanan-laz-anggota-foz-dan-baznas/ pada 26.
