The Role of Zakat in Establishing Social Welfare and Economic Sustainability: The Case of Saudi Arabia

Abstract

Much recent literature has studied the role of Zakat in establishing social welfare and economic sustainability. It is believed that Zakat is among the most important systems for Muslims: indeed, it enables the wealthy and rich to purify their hearts from greed by giving a part of their wealth to the needy. Therefore, Zakat redistributes income and wealth, plays an important role in poverty alleviation, and contributes to social welfare and economic sustainability. This study discusses the role of Zakat in establishing social welfare and economic sustainability by reviewing theoretical and empirical studies. This prior research is then extended by examining the historical development of Zakat and the structure of Zakat accounting method in Saudi Arabia. This study is significant in creating awareness about Zakat’s role and its impact on the social life of a society. The researcher employs qualitative research methods, reviewing traditional and contemporary Islamic sources to explicate the significance of Zakat as an institution, and elaborate its impact on social life in line with the main theme of the study. The topic of Zakat is one that has received increased attention by researchers interested in Muslim values, social welfare, economic sustainability, and accounting. However, little research has been produced on the intersections of these four topics in the specific context of Saudi Arabia. The overall findings show that Zakat has a positive impact on social welfare and economic sustainability in Saudi Arabia.