Zakat collection through the contract of wakalah (agent): A comparative study of Badan Amil Zakat Nasional (BAZNAS) and Lembaga Zakat Negeri Kedah (LZNK)

The concept of wakalah (agency) is essential in the management of various Islamic financial activities, allowing the delegation of tasks such as collection and distribution to an authorized agent or organization. This system has been successfully applied to economic transactions, including Islamic banking and takaful. The application of wakalah may also have a significant impact on improving the efficiency and effectiveness of zakat collection. Therefore, this research aims to explore the application of wakalah contracts in zakat collection by BAZNAS West Java and LZNK Kedah, as well as examine the role of agents in both zakat boards. In addition, this study analyzes the best practices of wakalah contracts in zakat collection. Qualitative research with case studies is appropriate for this discussion, and content analysis is used in an inductive analysis process with documents and interviews as research instruments. The findings demonstrate that BAZNAS and LZNK comply with the contractual requirements and pillars of wakalah. Adding to that, LZNK is superior in the utilization of technology, such as the My Amil application system for zakat agents and My Employer for employee payroll deduction. The implemented centralized management approach also improves the effectiveness and efficiency of zakat collection and facilitates supervision at all levels or categories of agents. However, BAZNAS has diverse strategies and good agent recruitment criteria, and has recorded higher zakat collection due to due to the dominance of deductions from civil servants or employees. Additionally, each zakat agent faces the same challenge of limited human resources, but the second zakat board's initiative namely the incentive scheme, was deemed more effective. This study highlights the benefits of using technology, the diversity of strategies, the importance of individual qualifications of agents, and effective initiatives in the face of challenges in improving the efficiency and effectiveness of zakat collection through agents.