Should Agricultural and Mining Companies Calculate Zakat on A Net Income or Revenue Basis? The Case of Corporate Zakat in Kuwait, Egypt, Saudi Arabia, and Malaysia

Abstract

This paper aims to compare the use of net income and proposed revenue basis for calculating corporate zakat in the mining and agricultural sector. It is based on the premise that, while agricultural and mining zakat methods calculates zakat on the basis of revenue, some countries adopt net income and working capital basis for calculating corporate zakat in these sectors. This study documents actual zakat payments by corporations and a proposed revenue-based method for computing corporate zakat  The sampled companies are headquartered in Kuwait, Malaysia, and Saudi Arabia, and the study spans the years 2016 to 2018. The results demonstrate that zakat-based net income for agricultural and mining companies is less than the revenue-based, resulting in a lower zakat payment.