IDEAS home Printed from https://ideas.repec.org/a/abd/kauiea/v34y2021i1no1p3-24.html
   My bibliography  Save this article

How Governance Practices Influence Mandatory Zakah Payment in Saudi Arabia? كيف تُؤَثر مُمَارسات الحَوْكَمة في الدفع الإلزامي للزكاة في المملكة العربية السعودية؟

Author

Listed:
  • Abdulsalam Ahmed Sawmar

    (Lecturer, Islamic Economics Department Islamic University of Madinah, Saudi Arabia)

  • Mustafa Omar Mohammed

    (Associate Professor, Kulliyyah of Economics and Management Sciences International Islamic University, Malaysia)

Abstract

The purpose of this study is to investigate the influence of governance practices of the formal zakah authority in Saudi Arabia, the GAZT (General Authority of Zakat and Tax), on zakah payment compliance. It employs a quantitative approach using a questionnaire survey of actual zakah payers in Saudi Arabia. The analysis of one hundred and twenty-five usable questionnaires collected through random sampling from al-Madinah region was done using the PLS (Partial Least Squares) - SEM (Structural Equation Models) technique. The results suggested that the perceived transparency and disclosure, and the perceived procedural fairness had significant and positive relationships with zakah payment compliance. In addition, trust was found to have a mediating effect on the relationship between the perceived governance of the zakah authority and zakah payment compliance. The study’s findings provide interesting insights that benefit both theory and practices. تهدف هذه الدراسة إلى استقصاء تأثير ممارسات الحوكمة للهيئة العامة للزكاة والدخل في المملكة العربية السعودية على الامتثال لدفع الزكاة. ولتحقيق هذا الغرض استخدمت الدراسة منهجًا بحثيًا قائمًا على التحليل الكمي من خلال توزيع استبانة على دافعي الزكاة في المملكة العربية السعودية. وتم تحليل مائة وخمسة وعشرين استبانة صالحة تم جمعها من عَيِّنَات عَشْوَائية في منطقة المدينة المنورة باستخدام أداة المربعات الصغرى الجزئية (PLS) التي تمثل مقاربة مبنية على نماذج المعادلات الهيكلية (SEM). وأظهرت نتائج الدراسة أن الشفافية والإفصاح المُتوقعين، والعدالة الإجرائية المُتصورة لها علاقات مهمة وإيجابية مع الامتثال لدفع الزكاة. علاوة على ذلك وجدت الدراسة أن الثقة لها تأثير وسيط على العلاقة بين الحوكمة المأمولة لهيئة الزكاة والامتثال لدفع الزكاة. تقدم نتائج الدراسة رُؤى مُثيرة للاهتمام من شأنها أن تُفيد في الجانبين النظري والتطبيقي.

Suggested Citation

  • Abdulsalam Ahmed Sawmar & Mustafa Omar Mohammed, 2021. "How Governance Practices Influence Mandatory Zakah Payment in Saudi Arabia? كيف تُؤَثر مُمَارسات الحَوْكَمة في الدفع الإلزامي للزكاة في المملكة العربية السعودية؟," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 34(1), pages 3-24, January.
    • Handle: RePEc:abd:kauiea:v:34:y:2021:i:1:no:1:p:3-24
    DOI: 10.4197/Islec.34-1.1
    as

    Download full text from publisher

    File URL: https://iei.kau.edu.sa/Files/121/Files/153866_34-01-01-AbdSalam-16022021.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.4197/Islec.34-1.1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Katharina Gangl & Stephan Muehlbacher & Manon de Groot & Sjoerd Goslinga & Eva Hofmann & Christoph Kogler & Gerrit Antonides & Erich Kirchler, 2013. ""How can I help you?" Perceived Service Orientation of Tax Authorities and Tax Compliance," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 69(4), pages 487-510, December.
    2. Nasim Shah Shirazi & Md. Fouad Bin Amin, 2009. "Poverty Elimination Through Potential Zakat Collection in the OIC-member Countries: Revisited," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(4), pages 739-754.
    3. C. Guermat & A.T. Al-Utaibi & J.P. Tucker, 2003. "The Practice of Zakat: An Empirical Examination of Four Gulf Countries," Discussion Papers 0302, University of Exeter, Department of Economics.
    4. Yongjiao Yang & Iain Brennan & Mick Wilkinson, 2014. "Public trust and performance measurement in charitable organizations," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 63(6), pages 779-796, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Puklavec, Žiga & Kogler, Christoph & Stavrova, Olga & Zeelenberg, Marcel, 2023. "What we tweet about when we tweet about taxes: A topic modelling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1242-1254.
    2. Fábio Pereira Silva & Reinaldo Guerreiro & Eduardo Flores, 2019. "Voluntary versus enforced tax compliance: the slippery slope framework in the Brazilian context," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(2), pages 147-180, June.
    3. Mohammed B Yusoff, 2012. "Zakat Distribution and Growth in the Federal Territory of Malaysia," Journal of Economics and Behavioral Studies, AMH International, vol. 4(8), pages 449-456.
    4. Colin C Williams & Junhong Yang, 2017. "Tackling falsely-declared salaries in Bulgaria: evidence from a 2015 survey," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 333-351, September.
    5. Aysha N. Al-Salih, 2020. "The Role of Zakat in Establishing Social Welfare and Economic Sustainability: The Case of Saudi Arabia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(6), pages 196-202, December.
    6. Nabi, Mahmoud Sami, 2021. "لتشع تونس من جديد [Making the Tunisian Resurgence]," MPRA Paper 107225, University Library of Munich, Germany.
    7. Jean Damascene Mvunabandi & Charmaine Lathleiff & Paul-Francois Muzindutsi, 2022. "Financial Accounting as a Tool to Enhance Non-Government Organisations Performance: A Case Study of a Large NGO in Durban, South Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 12(3), pages 10-17, May.
    8. C. Williams, Colin & Bezeredi, Slavko, 2017. "Tackling The Illegal Practice Of Under-Reporting Employees’ Wages: Lessons From The Republic Of Macedonia," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 8(3), pages 243-258.
    9. Mejda Bouanani & Besma Belhadj, 2019. "Zakat and Poverty Alleviation in Tunisia Using the Fuzzy Approach," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(2), pages 421-432, June.
    10. Katharina Gangl & Erich Kirchler & Christian Lorenz & Benno Torgler, 2015. "Wealthy Tax Non-Filers in a Developing Nation: The Roles of Taxpayer Knowledge, Perceived Corruption and Service Orientation in Pakistan," CREMA Working Paper Series 2015-08, Center for Research in Economics, Management and the Arts (CREMA).
    11. Ahmed,Habib & Mohieldin,Mahmoud & Verbeek,Jos & Aboulmagd,Farida Wael, 2015. "On the sustainable development goals and the role of Islamic finance," Policy Research Working Paper Series 7266, The World Bank.
    12. Lakis Vaclovas & Baltušytė Daiva, 2017. "Islamic Banking as an Alternative to Banks in the Western Countries," Ekonomika (Economics), Sciendo, vol. 96(3), pages 73-89, January.
    13. Weber Christoph S. & Nickol Philipp, 2016. "More on Calendar Effects on Islamic Stock Markets," Review of Middle East Economics and Finance, De Gruyter, vol. 12(1), pages 65-113, April.
    14. Salman Ahmed Shaikh, 2015. "Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 1011-1027.
    15. Mohieldin , Mahmoud & Rostom , Ahmed & Fu, Xiaochen & Iqbal, Zamir, 2012. "The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 20, pages 55-120.
    16. Jonathan Farrar & Steven E. Kaplan & Linda Thorne, 2019. "The Effect of Interactional Fairness and Detection on Taxpayers’ Compliance Intentions," Journal of Business Ethics, Springer, vol. 154(1), pages 167-180, January.
    17. Biddle, Nicholas & Fels, Katja & Sinning, Mathias, 2017. "Behavioral Insights and Business Taxation: Evidence from Two Randomized Controlled Trials," IZA Discussion Papers 10795, Institute of Labor Economics (IZA).
    18. Hofmann, Eva & Voracek, Martin & Bock, Christine & Kirchler, Erich, 2017. "Tax compliance across sociodemographic categories: Meta-analyses of survey studies in 111 countries," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 63-71.
    19. Colin C. Williams & Friedrich Schneider, 2016. "Measuring the Global Shadow Economy," Books, Edward Elgar Publishing, number 16551.
    20. S. M. Naseem, 2012. "A Review Of Studies On Poverty In Pakistan: Origin, Evolution, Thematic Content And Future Directions," PIDE Books, Pakistan Institute of Development Economics, number 2012:1 edited by Rashid Amjad, December.

    More about this item

    Keywords

    Zakah institution; Governance; Transparency; Fairness; Zakah compliance; Saudi Arabia. مؤسسات الزكاة، الحوكمة، الشفافية، العدالة، الامتثال الزكوي، السعودية.;
    All these keywords.

    JEL classification:

    • P40 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - General
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:abd:kauiea:v:34:y:2021:i:1:no:1:p:3-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: King Abdulaziz University, Islamic Economics Institute. (email available below). General contact details of provider: https://edirc.repec.org/data/cikausa.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.