Republic of the Philippines

Bangsamoro Autonomous Region in Muslim Mindanao

BANGSAMORO TRANSITION AUTHORITY
Cotabato City

First Regular Session

______________________________________________________________________________
Introduced by: Sahira Ibrahim and Junisa D. Kimamao

BTA Parliament No. ___

AN ACT INSTITUTIONALIZING THE PAYMENT OF ZAKAT BY THE MUSLIM IN

THE BANGSAMORO AUTONOMOUS REGION MUSLIM MINDANAO, CREATING
THE BAIT-UL-MAL AND FOR OTHER PURPOSES

Be it enacted by the Bangsamoro Transition Authority in session assembled:

Name and Purpose

SECTION 1. Short Title. – This Act shall be known as “Bangsamoro Bait-Ul-Mal-Zakat Act”

SECTION 2.Purpose. – There is hereby created Bait-Ul-Mal which shall be responsible for the
collection of zakat among Muslims and the implementation thereof. To promote and accelerate
the socio-economic development of the Bangsamoro Autonomous Region in Muslim Mindanao
by collecting, appropriating and disbursing zakat fund to legitimate channels to be ascertained
first by the Shari'a Advisory Council. To establish, participate and support in any social services
that will help alleviate the poverty in the Bangsamoro Region which will be subjected to the
basic principles and rulings of Islamic Shari'a within the purview of the aforementioned declared
policy.

SECTION 3.Declaration Policy. – To alleviate poverty, promote and accelerate socio-economic

development of the Bangsamoro Autonomous Region in Muslim Mindanao by institutionalizing
and coordinating the collection of Zakat, and the distribution thereof; and to carry out charitable
and humanitarian, and other social services in accordance to Islamic concept of social welfare
system as ascertained by Shari’a Lawyer Council consistent with Islamic principle.
SECTION 4.Definition of Terms. – When use in this Title:

(A) The term “zakat” means the obligatory contribution measured based on assets of the
owned by Muslim that satisfy the conditions under the Islamic Shari’a.
(B) The term “Bait-Ul-Mal” means the welfare fund, established under section 5 of this
Act.
(C) The term “Board” means the Bait-Ul-Mal Board constituted under section 5 of this
Act for the administration of Baitu-Ul-Mal.
(D) The term “Islamic Shari’a” means the rules contemplated in Islamic laws derived
from Qur-an and Hadith.

Organization and Functions of the Board

SECTION 5.Bait-Ul-Mal Board and its purpose. – There is hereby created an organization to be
known as Bait-Ul-Mal under the Ministry of Finance. It shall be responsible for the
administration of assessment, collection and disbursement of zakat among the Muslim in the
Bangsamoro Region, andthe implementation thereof in accordance with the system provided in
the Islamic Shari’a.

SECTION 6. Composition of Bait-Ul-Mal Board. – The Board shall be composed of one (1)
chairman, one (1) governor and seven (5) board members. The chairman of the Board shall also
be the Minister of Finance. The governor as well as the board members shall have sufficient
knowledge in finance and Shari’a Law.

SECTION 7. Powers and function of the Board. – The powers and function of Bait_Ul-Mal
shall include the assessment of the collection of zakat from zakat payers. The procedure shall be
provided in the Implementing Rules and Regulation (IRR) for this Act. This IRR, among the
others provided herein, shall include the venue, manner and time of payment.

The powers of the Bait-Ul-Mal shall give effect to and direct the supervisory and
administrative powers conferred to it by this Act. These powers and functions shall include but
not limited to the following:

(A) The power to recommend the promulgation of rules and regulations by the Committee
on Finance, Budget and Management;
(B) The power to issue rulings of first impression or to reverse, revoke or modify any
existing ruling of the Board;
(C) The power to assign or reassign zakat officers to establishments where articles subject
to excise tax are produced or kept; and
(D) Others provided that it is consistent with the Shari’a Law.
 Creation and Purpose of Shari’a Lawyer Council

SECTION 8. Shari’a Advisory Council. —There is hereby created a Shari’a Advisory Council
of the Bangsamoro Bait-Ul-Mal which shall be composed of not more than five (5) members,
selected from among Islamic scholars and jurists of comparative law.

The members shall be elected at a general shareholders meeting of the Bait-Ul-Mal Board every
year. The Board is hereby authorized to select the members of the first Shari’a Advisory Council
and to determine their remunerations.

SECTION 9.Responsibility of the Shari’a Advisory Council. —The responsibility of the Shari’a
Advisory Council shall be to offer advice and undertake reviews pertaining to the proper
application of the principles and rulings of the Islamic Shari’a on the distributions of zakah, but
it shall not directly involve itself in the operations of the distributions.

Who are Required to Pay Zakat

SECTION 10. Persons liable to zakat. – The person who will be required to pay zakat, they
must meet the following criteria:

(A) The person should be Muslim, adult, of sound mind;

(B) They must possess a certain minimum amount of extra wealth (called nisab), fully
owned by them in excess of personal use (such as clothing, food, shelter, household
furniture, utensils, cars, etc);
(C) They should have had this minimum amount in possession for a complete lunar year
(hawl);
(D) The wealth should be of a productive nature, from which they can derive profit or
benefit such as merchandise for income, gold, silver, livestock, etc.;
(E) The minimum amount (or Nisab) should not be owed to someone, i.e., it should be
free from debt; and
(F) Other criteria provided in Shari’a Law.

SECTION 11. The zakat rate to be imposed shall be the following:

(A) Income
A.1 -Income from wages and salary - 2.5% based on net salary monthly
A.2 - Income from business – 2.5% based on profit monthly

(B) Gold and silver – 2.5% of the total amount commodities provided that no zakat to be
paid on less than 200 dirhams for gold and silver or its equivalent in Philippine peso
 (C) Agricultural Products
D.1 - agricultural products which were watered by rain, springs or torrents is 10%
every harvest
D.2. - agricultural products which were irrigated is 5% every harvest

(E) Livestocks (Camels, cows, goats and sheep)

E.1. livestock owned for the purpose of carriage, ploughing or irrigation are
exempted from zakat
E.2. livestocks owned to graze and breed are liable to zakat every sale

(F) Fixed assets

F.1 - fixed asset used as a residential house or long term investment with no
intention to sell is not liable to zakat
F.2. fixed asset used not as a residential house or long term investment with intention
to sell or for capital appreciation is liable to zakat of __% of gross sales

(G) others proved in the Islamic Shari’a

SECTION 12. Donation.– The Board shall be open toreceive any donation from private
individuals, government agency, organizations, local government units and others who shall
offer.

Disbursement of Collected Zakat

SECTION 13.Who are entitled to receive Zakah. – In Islamic Shari’a, there are eight groups of
people to whom Zakat should be spent:

(A) Fuqaraa- Those who own property in excess of basic necessities but below the value
of Nisab;
(B) Masakeen: Persons of extreme poverty who possess no wealth whatsoever.
(C) Aamileen: (Zakat collector) Those persons who are appointed by an Islamic Head of
State or Government to collect Zakat. It is not necessary that this be a needy person.
(D) MuallafatulQuloob: Those poor and needy persons who are given Zakat with the
intentions of solidifying their hearts because they maybe recently converted to Islam
or to bring them closer to Islam.
(E) Ar-Riqaab: slaves whose masters have agreed to set them free on a payment of a
fixed amount. Zakat may be used to purchase their freedom.
(F) Ibnus-Sabeel: A traveler, who, whilst wealthy at his residence, is stranded and in need
of financial assistance.
(G) Al Ghaarimeen: A person whose debts exceeds his assets and his net assets (after
deducting his liabilities) is below the Nisab limit. To determine whether a person
qualifies, his basic necessities of life (house, furniture, clothes, vehicle, etc.) will not
 be taken into account. It is conditional that the debts were not created for any un-
Islamic or sinful purpose.
(H) Fi Sabeelillah: Those who are away from home in the path of Allah. Those in Jihaad,
those seeking knowledge or a stranded Haji may be assist with Zakat if they are in
need. And
(I) Others provided in Shari’a Law.

SECTION 14. Distribution. – The distribution of zakat fund shall be appropriated and disbursed
to legitimate channels subject to ascertainment and review first by the Shari'a Advisory Council
annually.

Approved.