ABSTRACT
Some Indonesian companies have observed paying corporate zakat, despite its ambiguous Islamic jurisprudence and Indonesian law. This chapter explores how Indonesia's corporate community views corporate zakat's legitimacy and which ethical, religious, or secular values corporate payers (and non-payers) identify within this newly mandated practice. If zakat laws and regulations in Indonesia do not force businesses to pay zakat, do Islamic commercial banks obey this obligation to fulfill a religious obligation? It focuses on case studies of compliance with corporate zakat by Islamic commercial banks in Indonesia. It provides a detailed contextual analysis of each bank's experience when deciding to pay or not to pay their zakat to explore corporate zakat's legitimacy, both in its interpretation and imposition, from the subjects’ perspective. It finds that the Islamic commercial banks’ view on the legitimacy of regulating corporate zakat in Indonesia is influenced by a combination of two to three factors: their type of business (i.e., as a sharīʻa-related industry), their attitude toward the principles of zakat in Islam, their size (i.e., amount of profit considered eligible to pay zakat), and benchmarking to other competitors. A combination of factors number one and two become the most significant factors.
