Zakat: a review of the theory and practice in the literature Literature review Many researchers especially in Muslim countries

have done a lot of research regarding on zakat topic. 2.5 percent are needed on wealth for zakat expenses. Here are the points of view of researcher of the zakat definition: Literally, zakat means purification. Technically it means a contribution of a proportion of wealth for the use of the poor and needy as sanctification for the remainder of the property. Hence in modern terminology, zakat is a tax collected from the relatively richer Muslims and distributed (mainly) among the poorer Muslims (Metwally, 1997). Zakat is an Islamic religious tax charged on the rich and well-to-do members of the community for distribution to the poor and the needy as well as other beneficiaries based on certain established criteria according to the Quran Norazlina Abd. Wahab, Abdul Rahim Abdul Rahman, (2011). Zakat is so important in Islam that it is made one of the five pillars of Islam. In fact, it is the third, according to the order of listing them by the prophet Muhammad (SAW), coming before pilgrimage to Makkah and Ramadan fasting. In the Glorious Quran (e.g.73:20). According to the traditional list of pristine Islam, zakat is payable on five categories of items. These include zakat on livestock, zakat on farm produce, zakat on gold and silver (i.e cash), zakat on merchandize and zakat on buried treasures and mines Akanni (2006). Theoretically Zakat were needed to distribute to the needy people and given by all Muslim societies. Zakat has a bright future where it actually can be further implement in Islamic economics in which it can help to eliminate poverty and increase the Gross Domestic

Product. It is a duty for rich Muslim helping poor Muslim in their life by giving zakat said Akanni (2006). It is stated in Al-Quran that a Muslim should pay Zakat. There are some differences of opinion among scholars and schools of thought on the scope of Zakatable items and the applicable rate Akanni (2006). Mostly stated 2.5 percent is the standard on paying zakat in all over the world. There are different viewpoints on re-visiting the fiqh issues and doing ijtihad. In modern times, the value and function of Zakat has lost sight of its primary objectives (Zayas, 2003). In this paper, researcher will revise the historical of the zakat in time of Prophet and classical fiqh to give more understanding to people. Akanni (2006) research said that the main instrument in alleviate poverty in human society is the Zakat. Akani also mention that mostly poverty is very high among Muslims. The

research also supported by Bayu Silvia, Masudul Alam Choudhury, (2006) research which stated that Zakat is an incentive spending inculcated by spiritual consciousness to spend in poverty alleviation as an Islamic duty. According to Abd. Wahab & Abdul Rahman (2011) in theory, zakat implication on economics positively affect major economic variables such as consumption, saving, poverty eradication and economic growth. The researcher focuses in how government use their way through financial institution in managing the zakat. Beside, the research is more in empirical study in conceptual model of efficiency which can be use as a standard of institution efficiency of management in Malaysia even mostly in Muslim countries. Another researcher agreed that zakat is very possible to use as an alternative fund resource to reduce the poverty Mujiyati et al (2010).

References: Akanni (2006), PROFILING A MODEL FOR THE ADMINISTRATION OF ZAKAT IN A MULTI-RELIGIOUS SOCIETY: THE CASE OF SOUTH-WESTERN NIGERIA, Journal of Philosophy and Culture, Vol. 3, No. 2 June 2006. Bayu Silvia, Masudul Alam Choudhury, (2006),"A phenomenological conception of private sector responsibility in socioeconomic development", International Journal of Social Economics, Vol. 33 Iss: 12 pp. 796 807 M.M. Metwally, (1997),"Economic consequences of applying Islamic principles in Muslim societies", International Journal of Social Economics, Vol. 24 Iss: 7 pp. 941 957