Compliance of the Business Zakat Payment in Malaysia: A Theoretical Economic Exposition

The issue on compliance behavior of business zakat payment has been the subject of much discussion among both academicians and practitioners in Malaysia especially using the economic approach. Lack of review of the literature in the zakat scenario explained the compliance issue based on economic approach. Most of the previous studies on this issue only focused on the behavior approach. In contrast, to the study on the subject of tax compliance are numerous and used various approaches. Hence, firstly this paper is to identify the factors influence compliance behavior of zakat based on previous discussion and secondly to expose the economic approach as an alternative explanation in the issue of zakat compliance. The exposition is based on Expected Utility Theory and Utility Function Model as framework. The unit of study is among the small and medium industry in Malaysia.