Zakat Payment: Tabung Haji
As an Islamic institution, before distribution of dividend to its members, Th pays business tithe (zakat) from the profits earned during the year and the amount of working capital at the end of the zakat financial year. The prescribed rate of zakat is 2.5% on the aggregate of the above sum. Th pays business zakat on behalf of its depositors based on aqad izin where depositors are considered as a fund provider for the business and investment of Th. Subsidiary companies of Th are also paying zakat using the same formula as above. Figure 12 below, shows the amount of zakat paid by Th has increased significantly, i.e. From below RM4 million (US$1.1 million) in 1990 to over RM16 million (US$4.2 million) in 1998.
Figure 12: Zakat Payment
Source: Towards Islamic Banking: Experience and Challenges, Institute of Policy Studies. Republished with permission.
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