Zakat board fears lack of funds as retrenchments, number of recipients rise

The Selangor zakat board says up to 80,000 families may need assistance this year.

PETALING JAYA: The Selangor zakat board fears it may have insufficient funds to provide financial aid to those eligible, or asnaf, as it expects lower zakat collection this year due to the wave of retrenchments as companies struggle to stay afloat in the economic crisis.

The Lembaga Zakat Selangor (LZS) said it expected to collect up to RM800 million this year, compared to almost RM900 million in 2019.

This is because over 70% of the annual zakat collection comes from business and individuals’ income tax.

While the number needing assistance has increased gradually over the years in Selangor, LZS estimated a surge of up to 80,000 families needing assistance this year. The prolonged crisis could push the number higher, it said.

“There were more than 60,000 families which required assistance last year. Many of them were previously zakat contributors but now they are listed as the new asnaf,” LZS’s CEO Saipolyazan M Yusop told FMT.

According to the Socio-Economic Research Centre, the unemployment rate could hit 6.5% by the end of the second quarter. Quoting figures from Socso, the think tank said 53,952 lost their jobs between January and July 4, exceeding the figure for the whole of last year.

This figure only covers contributors to Socso’s Employment Insurance System and does not take into account some 2.7 million who are self-employed.

Meanwhile, Mustapa Mohamed, the minister in charge of economic affairs, had warned that the poverty rate would likely increase in tandem with individual per capita income, which had doubled from 15 years ago.

Mustapa said the income per capita was about RM20,000 in 2005, and had since increased to RM45,000.

Saipolyazan said LZS might cut some of its financial assistance to cater to the growing number of people in need of financial help and to ensure no needy family was left behind.

“LZS may reduce or suspend the non-critical financial assistance such as scholarships, capital expansion for business, rental assistance and medical bills.

“For the time being, we’re focusing the zakat collection solely for basic living expenses monetary aid,” he said.

To solve the problem of insufficient funds, LZS had devised a post-Covid-19 collection strategy where it would focus on sectors and industries that were less impacted by the crisis.

“LZS is focusing on the monthly zakat contribution from the government sector and some of the services sectors such as food supply, security and financial services,” he said. - FMT