Bill on Zakat Management

The House of Representatives approved the Bill on Zakat Management (“Bill”) on 27 October 2011. The Bill aims to improve the management of zakat and also replace Law No.38 of 1999 on the same issue, which has become outdated, and is no longer appropriate for zakat management nowadays.

Zakat is the Islamic concept of tithing and alms. It is defined under Article 1 (2) as  Muslims or legal entities donating their assets in accordance with Islamic principles. Zakat management aims to improve the effectiveness and efficiency of zakat management services and improve the benefit of zakat in terms of Muslims welfare and alleviating poverty (Article 3).

The Bill re-regulates the National Zakat Management Agency (Baznas), provisioned in Chapter II of the Bill. The Bill covers Baznas’ duties and functions (Article 7), membership (Articles 8 to 13), and regional Baznas in provinces and regencies/cities (Articles 15-16). The Bill states that Baznas is an independent non-structural government institution and reports to the President through the Minister of Religious Affairs (Article 5 (3)). Article 6 affirms Baznas as the only agency that is authorized to carry out zakat management on a national scale.