Zakat and SDGs : The impact of zakat on economic growth, consumption and investment in Malaysia

Suprayitno, Eko (2018) Zakat and SDGs : The impact of zakat on economic growth, consumption and investment in Malaysia. Presented at The 2018 International Conference on Islamic Economics and Business (ICONIES 2018), 2018, Malang.

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Abstract

This study aims to look at the impact of zakat distribution on macroeconomic in Peninsula Malaysia by using OLS, 2-SLS and ECM analysis. This research is initially undertaken because many economists today believe that zakat does not influence the economy at the macro level because the zakat rate of 2.5 per cent is not significant. This issue has motivated us to conduct this study on the impact of zakat distribution in Malaysia.InMalaysia zakat is recognized as a fiscal tool whereby a rebate is given to income taxpayers who pay zakat. This study finds that zakat has a positive and significant relationship with economic growth, consumption andinvestment respectively. This means that an increase in the amount of zakat distribution will cause an increase in economic growth, consumption and investment. Lastly, the result of the ECM analysis shows that distribution of zakat have influence significant and positive impacts on economic growth. The long-run elasticity of the zakat variable is positive and significant.Empirical evidence in Malaysia support that zakat can influence economic growth, investment and consumption. Hence the Malaysian model of zakat administration and fiscal instrument can influence the economy at the macro level. Such fiscal policy can be applied in other countries

Item Type:	Conference (Paper)
Keywords:	zakat; economic growth; consumption; investment
Subjects:	14 ECONOMICS > 1401 Economic Theory > 140199 Economic Theory not elsewhere classified 14 ECONOMICS > 1499 Other Economics > 149901 Comparative Economic Systems 14 ECONOMICS > 1499 Other Economics > 149999 Economics not elsewhere classified
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Eko Suprayitno
Date Deposited:	02 Jul 2024 14:48

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