The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1759-0817.htm

JIABR
12,5 Does trust in zakat institution
enhance entrepreneurs’ zakat
compliance?
768 Saeed Awadh Bin-Nashwan
Islamic Business School, Universiti Utara Malaysia, Sintok, Malaysia and
Received 12 September 2020 College of Administrative Sciences, Seiyun University, Seiyun, Yemen, and
Revised 2 January 2021
2 May 2021
9 May 2021 Hijattulah Abdul-Jabbar and Saliza Abdul Aziz
Accepted 26 May 2021
Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia,
Sintok, Malaysia

Abstract
Purpose – Although zakat is a principal way to redistribute wealth, a unique practice designed to achieve a
sustainable Islamic economic and social system, zakat institutions and agencies in most Muslim countries still
suffer from the perplexing issue of low zakat collections, ascribing this to the level of compliance among zakat
payers. To provide more insight into this lacuna, this study aims to examine the role of trust in zakat
institution through the relationship between socio-economic determinants (i.e. religiosity, moral reasoning,
peer influence and system fairness) and zakat compliance decisions.
Design/methodology/approach – From a typical Islamic country, Yemen, a random sample of 274
entrepreneurs was drawn for a self-administered survey. To estimate and analyze the compliance model,
SmartPLS structural equation modeling was used.
Findings – The results show that all hypothesized direct relationships are supported. Importantly, the trust-
moderated interactions of religiosity, moral reasoning and peer influence on zakat compliance are significant,
although its interaction with zakat system fairness is not.
Practical implications – The results should be helpful for policymakers and responsible institutions in
Muslim communities to understand how different levels of trust can play an important role in zakat payers’
compliance to boost or erode zakat funds. This research also contributes important inferences for managers
about the necessity of inculcating religious and moral values among zakat payers, formulating a fair system
and embarking on sensitization programs in society.
Originality/value – The research enriches the scanty literature by validating a viable compliance model
drawing on the socio-economic theory of regulatory compliance. Moreover, the model integrates the
moderating role of trust in socio-economic perspectives of zakat compliance.
Keywords Trust, zakat compliance, Socio-economic model, Wealth concentration,
zakat institutions
Paper type Research paper

Journal of Islamic Accounting and
Business Research
Vol. 12 No. 5, 2021
pp. 768-790
© Emerald Publishing Limited
1759-0817
DOI 10.1108/JIABR-09-2020-0282
1. Introduction
In modern economic discourse, wealth concentration and inequality have emerged as
among the root attributes of financial crisis and instability that have plagued almost
all Muslim communities. However, within the vibrant framework of the Islamic
financial system, it could be possible to solve the dilemma of wealth concentration
and ownership based on compliance with Shariah principles (Bin-Nashwan et al.,
2021). The imposition of zakat is among the most important religious and socio-
economic practices supporting the prevention of wealth concentration in a few hands
(Tlemsani and Matthews, 2020). It has several profound, socio-economic Entrepreneurs’
benefits when a well-to-do individual shares some of his (her) productive property zakat
or wealth and dispenses it among the marginalized and vulnerable in society
(Tlemsani and Matthews, 2013).
compliance
The success of compulsory zakat imposition – as a pivotal approach that can achieve
the well-being of all – is primarily contingent upon the success of zakat institutions in
effectively managing, coordinating and monitoring zakat funds. However, most
Muslim governments have so far managed zakat only as a peripheral system and not a 769
major resource within the fiscal system. Unlike income tax, which is receiving more
attention, Zakat is unfortunately treated as a voluntary practice (Wahab and Rahman,
2011), neglecting its supreme originality as a religious obligation, mentioned back-to-
back with the word “prayer” in the Quran. Moreover, modern Islamic economic systems
have focused on institutions of wealth creation (e.g. Islamic insurance and Islamic
banks), while little emphasis has been placed on institutions of wealth distribution,
such as zakat (Wahab and Rahman, 2011). This omission has resulted in weakening a
unique Islamic fiscal and social source that can contribute to national and economic
growth and development.
The survival strategy of zakat institutions is irrefutably to build trust among zakat
payers (donors) through the zakat channels (Mustafa et al., 2013). When a zakat institution
understands ways to instill trust in zakat payers, the economic development of Muslim
states could be strengthened (Kashif et al., 2018). Although payers’ trust is vital for zakat
institutions, as its absence could undermine their effectiveness, available evidence from
Muslim states, including Malaysia and Pakistan, indicates that this trust in official zakat
channels cannot be guaranteed (Kashif et al., 2018; Mustafa et al., 2013; Tajuddin et al., 2016).
For instance, the Pakistani government has adopted some stimulating strategies, such as
nominating banks to automatically collect zakat funds from the accounts of zakat payers in
the month of Ramadan (fasting month); however, it is documented that zakat payers
withdraw all their balances from banks before Ramadan, so that banks fail to deduct the
appropriate amount. Empirical evidence has attributed this to a lack of trust among zakat
payers, who prefer to pay through personal means rather than through formal institutions
or banks (Kashif et al., 2018).
Furthermore, in Yemen, a typical Muslim community, this is taken even further:
people tend to distribute their zakat funds directly to the poor and eligible recipients, as
they are reluctant to disclose their wealth to untrustworthy zakat offices (Bin-Nashwan
et al., 2020b; The General Directorate of Zakah Obligations (GDZO), 2016). However,
according to zakat Law No. 2 of 1999, the zakat authority (GDZO) is the only
responsible body for administering and collecting zakat funds from individuals and
companies, while any zakat payment does not go through this authority, it is
considered unlawful behavior (GDZO, 2016). Because all Yemenis are Muslims, there is
the potential for huge zakat funds; however, in reality, national collection through the
GDZO is still far below what is expected.
Over the 2010–2016 period, the annual reports of the GDZO showed that the zakat
collections appeared to be shrinking year in, year out, amounting to between some US$42m
and US$61m. Meanwhile, an excessive fiscal deficit took place in the actual proceeds of
zakat compared to the expected amount, a recurring feature from 2011 to date. The fiscal
deficit ranged between 3.5% (US$2.25m) and 40% (US$28m) (GDZO, 2016). This gap could
be traced to the reluctance of zakat payers to comply with the provisions through the
respective zakat institution (GDZO, 2016), preferring either to distribute the zakat due
directly to beneficiaries or just to hold on to it. The annual reports of the GDZO also
JIABR indicate that business zakat is the largest revenue source for the zakat institution,
12,5 representing 45% of the states’ total zakat revenue, but it is still disappointing compared to
the total number of active business enterprises as well as the increasing needs of zakat
beneficiaries (GDZO, 2016; Bin-Nashwan et al., 2020a).
To date, most research into zakat compliance has adopted behavioral frameworks,
e.g. theory of reasoned action (TRA) (Bidin et al., 2009), theory of planned behavior
770 (TPB) (Bin-Nashwan et al., 2021) and an extended TPB model (Andam and Osman,
2019). However, concern over the limitations of these behavioral models has been
raised, especially over time and context as well as generalization of the findings
(Bin-Nashwan et al., 2020b; Sniehotta et al., 2014). Sniehotta et al. (2014) called to lay
TPB theory to retire and rest as it is static in nature and it does not take into account
possible differences in contexts and cognitions of individuals. In the context of zakat,
studies using these models have focused on zakat payers’ behavioral intention, which is
merely the precursor to actual behavior. There is a lack of empirical attempts to
understand the actual compliance decisions of zakat payers derived primarily from
more comprehensive aspects, such as economic and socio-psychological perspectives.
This sheds light on the significance of the present study to explore the actual zakat
compliance behavior and its determinants in a unique way, by drawing on the socio-
economic theory of regulatory compliance (SETRC) (Sutinen and Kuperan, 1999). The
SETRC suggests that an extended model provides a more comprehensive explanation
of compliance behavior driven by various aspects, such as economic and socio-
psychological (Sutinen and Kuperan, 1999; Bin-Nashwan et al., 2020b). This framework
has the capacity to design and implement more efficient compliance behavior among
individuals, especially in a regulated environment like zakat (Bin-Nashwan et al.,
2020b), which is legislated through the enactment of laws and regulations, as in Yemen
(GDZO, 2016).
In an attempt to bridge this gap, four determinants linked directly to compliance
(religiosity, moral reasoning, peer influence and system fairness) and the moderating effect
of trust in zakat institutions were investigated in a comprehensive review of the literature to
provide new insight into zakat compliance studies. The novelty of this study emerges from
the following:

This research is among the few studies that examine the actual compliance behavior
of zakat payers and moves beyond investigating “intentions” which is merely a
precursor to the actual behavior itself.

This study shows how a wider empirical approach based on SETRC fits among
zakat payers and gauges their awareness and perception of complying with zakat
rules.

To the best of the authors’ knowledge, no previous study has scrutinized trust in the
zakat institution as a moderator in the compliance model.

It is anticipated that the results of this study and their practical applications will make
a considerable contribution to the body of knowledge and the nonprofit literature, as
well as zakat institutions and agencies in the Muslim world and Yemen in particular.
The rest of the study is arranged as follows. Section 2 throws light on the theoretical
framework and develops the hypotheses, while Section 3 discusses the research method
and data. The empirical results and discussion are added in Sections 4 and 5,
sequentially. Finally, in Section 6, the conclusion, implications and directions for future
research are drawn.
2. Literature review Entrepreneurs’
2.1 Socio-economic model of zakat compliance zakat
In the economic approach, which was built on the financial self-interest model developed by
Becker (1968), people always need to act rationally by balancing the costs and benefits of the
compliance
activity in question (Becker, 1968; Alm, 1999). In the taxation context, taxpayers’ decision on
whether to evade tax or not can be shaped based on rational choice (maximizing utility).
However, from an Islamic viewpoint, the economic aspect or rational principle can be
envisaged differently and uniquely, as it is principally based on faith and religious belief
771
(Bin-Nashwan et al., 2020a). In the Islamic faith, the rational principles are not just
dependent on the physical utility in the present life but also involve the utility in the
hereafter. The economic approach or rational principles have been applied extensively in tax
studies as it relies primarily on the deterrence perspective (Alm, 1999; Dularif et al., 2019).
However, this approach must be redefined to match the zakat nature, especially as zakat
compliance is not solely dependent on the fiscal burden (costs and benefits), but on faith and
spiritual factors (Bin-Nashwan et al., 2020a). This is because of the fact that zakat originally
arises from religious faith established by Allah, unlike taxes, which stem from fiscal
requirements of government. The other part of the SETRC is the social and psychological
perspective (Sutinen and Kuperan, 1999). It implies that compliance behavior can be
assumed as associated with surrounding environment influences and other social and
intrinsic factors, such as peer pressure, system fairness, trust and moral values (Sutinen and
Kuperan, 1999).

2.2 Religiosity and zakat compliance

A growing body of empirical studies has emphasized the considerable role of intrinsic
motivations like religious values in restraining, violating and behaving illegally (Torgler,
2006). An extensive stream of studies in diverse disciplines has found an important function
of religiosity in human behaviors, e.g. eliminating cheating rates (Rettinger and Jordan,
2005), deterring criminal behaviors (Baier and Wright, 2001), fostering ethical behaviors
(Vitell et al., 2009) and taxpayers’ compliance behavior (Mohdali and Pope, 2014). In tax
studies, Mohdali and Pope (2014) argued that religiosity had not been extensively
recognized in the context of tax compliance as one of the potential factors influencing the
issue of tax compliance, until emphasized recently by some studies, such as Stack and
Kposowa (2006), Torgler (2003); and Welch et al. (2005). These studies emphasized the
proposition that religious commitment has a significant impact on taxpayers’ compliance
decisions.
Overall, then, it is not surprising that religious beliefs provide certain levels of
individuals’ internal moral enforcement to act in accordance with legitimate activity; how
then if the activity itself stems from a religious base such as zakat? zakat is indeed a
cornerstone obligation of the Islamic faith; without it, the rulings of worship would be
incomplete. The important effect of religiosity on zakat compliance behavior cannot be
underestimated. In zakat literature, it is acknowledged that religiosity is a crucial
determinant, where a highly religious Muslim is anticipated to be more aware of paying
zakat to the responsible entity than those with less religious commitment (Abdullah and
Sapiei, 2018). Nevertheless, inconsistent results have been documented concerning the effect
of religiosity on zakat payers’ compliance decisions. Some previous studies (Bin-Nashwan
et al., 2020a; Abdullah and Sapiei, 2018) revealed a positive and significant relationship
between religiosity and decisions to comply with zakat provisions, although Idris et al.
(2003) did not find the usually reported result. Despite the inconsistencies evinced in prior
JIABR studies’ findings, further research on this aspect is required to strongly motivate people to
12,5 comply with zakat divine rules and to foster positive behavior:

H1. Religiosity positively affects zakat compliance.

2.3 Moral reasoning and zakat compliance

772 People’s tendency to comply with certain rules is explained as obeying a given norm
(Posner, 2000). From the groundwork of moral development laid down by Piaget (1932) and
Kohlberg (1969), researchers argue that moral reasoning develops not only through the
active roles of an individual in constructing moral judgment but also through social
connections with the environment. In this sense, the examination of moral reasoning is
regarded as essential in understanding the association between people and societal
performance. Passini (2010) also argued that an individual does not grow within a social
vacuum; he (she) constructs moral knowledge and a sense of justice and interprets the
functioning of the world through his (her) interaction with the society in which he (she) lives.
Today, the multicultural nature of almost all societies worldwide increasingly
emphasizes the importance of moral reasoning (Passini, 2010). In the compliance behavior
context, the level of people’s moral reasoning is considered a fundamental component in
understanding and shaping compliance behavior. Thus, the moral reasoning of zakat payers
can be one of the determinants that strongly predicts their formation of zakat compliance
behavior. It is a method to determine what is right or wrong in a certain situation, denoting
how the zakat payers behave morally in relation to producing that behavior (compliance) in
accordance with the rules of zakat institutions. The extant literature has shown that the
association between moral reasoning and compliance behavior commonly produces a
positive effect. Previous empirical studies addressing topics related to moral and ethical
issues have tended to concentrate on taxpayers’ compliance decisions (Braithwaite et al.,
2006; Lisi, 2015). Other studies, however, revealed that a high degree of moral standards
alone would not fully eliminate non-compliance (Bobek and Hatfield, 2003; Torgler, 2004).
Although much work has been done in the taxation-moral values scenario, little is known
about whether the zakat payers’ moral reasoning has a conclusive effect on zakat
compliance. It can be expected that zakat payers (entrepreneurs) with a high level of moral
consideration will be more compliant in paying zakat than those with low moral judgment:

H2. Moral reasoning positively affects zakat compliance.

2.4 Peer influence and zakat compliance

A vast amount of literature indicates the significance of social pressure in regulating human
behaviors. The social influence base posits that individuals continually compare themselves
with others to confirm whether or not their behaviors are favorable (Spicer and Becker, 1980). It
can be argued that people are affected by the social environment in which they make a decision,
rather than a mere emphasis on fiscal considerations of filing and reporting. For instance, this
might be seen as the pressure of social norms on individuals’ compliance decisions (Bobek et al.,
2013; Wenzel, 2005). The presence of social norms as a normative belief-driven behavior has a
profound influence in most conceptual frameworks across a range of disciplines, whether they
depend on obedience to authority, conformity, social influence, ethics, trust, fairness, or feelings
of morality and alienation (Bobek et al., 2013). In tax studies, Ho et al. (2013) surveyed taxpayers
in China and found that they tend to use relationship-based moral reasoning to judge tax
compliance issues.
 Integrating social norms (e.g. peer pressure) in the context of zakat compliance behavior, Entrepreneurs’
it can be advocated, all else being equal, that a person would comply with zakat according to zakat
the provisions of the zakat institution as long as he (she) perceives that compliance compliance
behaviors are the common social norms; in contrast, if zakat non-compliance behaviors
become pervasive, then the social pressure for compliance behavior may fade. Hence, the
authors of the present study argue that, based on social pressure, zakat payers are
susceptible to the peer effect, at least when there is sufficient information on the behavior of 773
peers. zakat payers’ compliance behavior is influenced by the behavior of their religious
leaders, neighbors, business partners, friends, relatives or those on whom they themselves
could put pressure through interaction in a regular way. Researchers (Andam and Osman,
2019; Jimenez and Iyer, 2016) claimed a positive prediction between social pressure and
compliance behavior. Thus, as a Muslim collectivist society, it can be surmised that in
Yemen significant others (e.g. friends, relatives and religious leaders) may constitute social
pressure on zakat payers (entrepreneurs) to comply with provisions of zakat:

H3. Peer influence positively affects zakat compliance.

2.5 System fairness and zakat compliance

Fairness is an essential element in a social system and involves the distribution and
allocation of valued resources. Bos et al. (2006) suggested that fairness refers to judgments
stemming from either actual or perceived assessment of oneself or oneself and others. A
theory in psychology that addresses fairness is the equity theory conceived by Adams
(1965), which concentrates on the perceived fairness of outcomes. Over time, much has been
done to extend the concept of fairness in this theory (Cook and Hegtvedt, 1983; Leventhal,
1980; Thibaut and Walker, 1978). Fairness has attracted researchers’ attention in diverse
disciplines, such as taxation (Gilligan and Richardson, 2005), organ donation (Boulware
et al., 2007) and organizational politics (Aryee et al., 2004). This is because of the motivating
role of fairness in people’s perceptions and behaviors.
Admirably, one of the primary objectives of imposing zakat in Islam is to establish
fairness among the community members, in which a portion of the wealth of the rich is
dispersed to the unfortunate and vulnerable groups. Thus, in the absence of such a
component, unfavorable behaviors (e.g. non-compliance) are unsurprising among zakat
payers, particularly if they perceive a lack of fairness integrated into all zakat-related
processes (assessment, collection and distribution). Although the perceived fairness of the
zakat system has rarely been examined by researchers, theoretically speaking a good
perception of the zakat system could instill a high level of compliant behavior. Equity theory
postulates that the balance of input and output makes people feel that they are treated fairly
and equitably; it can be invoked to explain compliance with the rules of zakat institutions
(Bin-Nashwan et al., 2020b). To establish a viable framework of zakat system fairness, three
main actors are involved: zakat payers and zakat recipients or beneficiaries on one side, and
on the other side the zakat system or institution. In a similar context like taxation, a positive
association between fairness perception and compliance behavior has been extensively
documented (Gilligan and Richardson, 2005; Murphy, 2009; Musimenta et al., 2017). Thus,
the greater the fairness established in the zakat system, the stronger is the entrepreneurs’
compliance with the zakat rules:

H4. System fairness positively affects zakat compliance.

JIABR 2.6 Trust in institution and zakat compliance
12,5 Nonprofit managers and scholars generally acknowledge that nonprofit organizations need
the trust of the public for effectiveness, legitimacy and financial and non-financial support.
Many researchers have indicated that trust is an essential factor in collaborative success;
however, other researchers have suggested that control systems reduce trust among
collaborators (Coletti et al., 2005; Zaheer and Venkatraman, 1995). Research addressing trust
774 in the literature on philanthropy provides a better alternative (Mustafa et al., 2013). The
significance of trust is, indeed, identified as a potent element in reducing perceptions of risk
(Mitchell, 1999), and an important feature in constructing organization-public relationships
(Schultz et al., 2019).
In the nonprofit context, public trust has been found to have a strong influence on
voluntary behavior as well as being a prerequisite for raising support (Sargeant and Lee,
2002; Schultz et al., 2019). As a complement to Islamic fiscal institutions, zakat institutions
principally strive to raise and manage capital, the role of attraction, retention and listening
to zakat payers is the heart and soul of the success and survival strategy for zakat
institutions (Kashif et al., 2018). This is because Muslims should have adequate trust in an
institution that is delegated as a religious obligation. Unlike other forms of voluntary
donations, zakat is a religious obligation derived from divine instructions. Nevertheless, lack
of trust in zakat institutions may encourage zakat payers to disburse zakat themselves
directly to recipients, which could be contrary to the rules and laws of some zakat
institutions, such as GDZO.
A theory behind the trust motive is social exchange; this indicates that the
relationship between zakat payers and zakat institutions always relies on reciprocity.
The literature on trust perception concentrates on nonprofit institutions in non-Islamic
environments (Coletti et al., 2005; Sargeant and Lee, 2002; Schultz et al., 2019; Zaheer
and Venkatraman, 1995), while little is known about the role of trust in zakat
institutions in enhancing Muslims’ compliance behavior in carrying out a religious
duty like zakat (Mustafa et al., 2013).
A sound understanding of zakat compliance behavior is essential for zakat
institutions/agencies as their effectiveness relies primarily on the level of support
provided by zakat payers. Public trust in zakat institutions plays a crucial part in
fostering giving zakat and in determining the extent of compliance; it is an integral
element of the zakat institutions’ sustainability (Bin-Nashwan et al., 2020c). As a result,
this study seeks to test the moderating effect of trust in zakat institution on the
relationships between zakat determinants and compliance. The greater the effect of
entrepreneurs’ trust beliefs in the socio-economic determinants of zakat compliance, the
stronger will be their compliance with zakat rules. All hypothesized relationships in the
research model are depicted in Figure 1:

H5. Trust in zakat institution positively affects zakat compliance.

H6. Trust in zakat institution moderates the relationship between religiosity and zakat
compliance.
H7. Trust in zakat institution moderates the relationship between moral reasoning and
zakat compliance.
H8. Trust in zakat institution moderates the relationship between peer influence and
zakat compliance.
 Entrepreneurs’
Religiosity
zakat
compliance
Moral
reasoning

Entrepreneurs’
Peer
Zakat compliance 775
influence

System
fairness

Trust in Figure 1.
institution Research framework

H9. Trust in zakat institution moderates the relationship between system fairness and
zakat compliance.

3. Data and methods

3.1 Sample
Given the main objective of this research as a detailed exploration and analysis of zakat
payers’ compliance behavior, the study opted for a quantitative approach with primary data
obtained by a cross-sectional questionnaire survey. As the eligible zakat payers in a typical
Muslim community like Yemen constituted the target population, only business enterprises
were selected as the research setting. This is because, although business zakat remains the
main contributor to the total state zakat revenue (e.g. in 2016, business zakat amounted to
over 45% compared to all other types of zakat), there is strong resistance to raising this type
of zakat collection, which is still distressingly low (Bin-Nashwan et al., 2020a; GDZO, 2016).
According to the Federation of Yemen Chambers of Commerce and Industry (FYCCI) (2016),
there are 56,326 registered business enterprises; the sample size of the present study was
therefore 382 (Cavana et al., 2001). However, this was increased to 500 to compensate for
non-response and to ensure complete data for analysis. Based on the information supplied
by the FYCCI and GDZO, the sample was selected using simple random sampling in light of
the list of entrepreneurs’ names obtained from the FYCCI and GDZO. Of the 500 self-
administered samples, 287 responses (a response rate of 57%) were retrieved. However, 274
questionnaires were ultimately considered as adequate data for further analysis, as three
outliers’ cases were detected and ten were incomplete, and thus discarded. Based on
Levene’s test of equality of variance between two sample sets (early responses and late
responses), the results suggest that variance was homogeneous across the two groups, and
the equality of variance could not be rejected at the significance level of 0.05. It can be fairly
assumed that non-response bias did not exist in the data of this study (Pallant, 2013).

3.2 Research instrument and pre-test

Prior to the main research being undertaken, a short questionnaire survey was piloted with
50 sampled respondents (registered entrepreneurs). Misunderstandings, ambiguity, typing
errors and any other problems were detected and removed, with the amendment of the
JIABR phrasing of some sentences in the survey. Furthermore, the validity and reliability analysis
12,5 of the pilot study revealed that the instruments are sufficiently valid and reliable, at least for
the preliminary sample (Table 1). Although the questionnaire was written originally in
English, its final version was translated into Arabic by an expert who is fluent in both
languages as well as in the relevant academic area, and back-translated into English by a
different expert to crosscheck the translation’s accuracy.
776 The survey instrument adopted here is self-administered questionnaires, consisting of
seven parts. The first part was designed to measure the demographic characteristics, while
parts 2–7 were made up of 37 measurement items for the main observable variables. Details
for the research instrument are presented in Table 2 and appendix.

3.3 Analysis tool

The data were analyzed using SmartPLS 3.0 version, adopting a variance-based approach
known as partial least squares-structural equation modeling (PLS-SEM). The selection of
PLS-SEM is for its favorable properties of convergence; it is a more appropriate method of
analysis than the prediction-oriented approach. Another valuable feature of PLS-SEM is its
capability to cope with the violation of multivariate normal distributions, providing robust
estimations for both normal and extremely non-normal data distributions (Hair et al., 2017).

4. Results and empirical analysis

4.1 Respondents’ profiles
The demographic and business characteristics of the wholly Muslim target sample (i.e.
entrepreneur zakat payers) are presented in Table 3. In total 88% of the 274 participants
were male, and a similar proportion was aged 30 years and above. As for education
background, more than half of the participants (54%) had up to secondary school
certificates, and the remainder either a bachelor’s degree and above (26%) or a diploma
certificate (20%).
In terms of business characteristics, most of the entrepreneurs (82%) had experience of
five or more years. In total 84% of the businesses are owned by a sole proprietor, leaving
11% and 4% operated as partnerships and companies, respectively. More than half (57%) of
the participants paid their zakat due directly to eligible beneficiaries (Asnaf). While 27%
paid 75% of the total zakat, the legal minimum threshold that must be paid to the formal
zakat institution (GDZO), and the remaining 25% to zakat recipients. Only 12% of the
respondents handed over the entire zakat due to the zakat institution. This could be traced to
the trust issue, resulting in a lack of legitimacy for the zakat authority. It should be noted
that the zakat law in Yemen allows zakat payers, whether individuals or companies, to
disburse zakat themselves directly to the eligible recipients of their family and relative or
companion, at a maximum of 25% of the total zakat, and the other 75% must be channeled
through the GDZO [The General Directorate of Zakah Obligations (GDZO), 2010].

Variables No. of items Cronbach’s alpha

Religiosity 6 0.939
Moral reasoning 9 0.791
Peer influence 5 0.713
Table 1. System fairness 7 0.741
Pilot study results Trust in institution 6 0.835
(n = 39) zakat compliance 4 0.718
No. Part
1 Demographics
2 Religiosity
3 Moral reasoning
4 Peer influence
5 System fairness
6 Trust in institution
7 zakat compliance
structure
questionnaire
Table 2.
Summary of the
Type of question Measurement No. of item Source
Age, gender, education, period of business, Categorical 6 –
ownership and to whom zakat paid previously
Respondents were asked to identify the extent of Five-Likert scale 6 Bin-Nashwan et al. (2020b)
fulfilling their routine Islamic religious activities (1 = strongly disagree
and beliefs to 5 = strongly agree)
Questions asked to evaluate the agreement or Five-Likert scale 9 Forsyth (1980)
disagreement of the respondents on paying zakat (1 = strongly disagree
is morally agreeable and arising of moral to 5 = strongly agree)
responsibility
The social norms pressure, such as family, friends, Five-Likert scale 5 Bobek et al. (2013)
business partners, Islamic leaders and other (1 = strongly disagree
important ones, to approve or disapprove zakat to 5 = strongly agree)
payments
System fairness involves at least two important Five-Likert scale 7 Gilligan and Richardson
aspects: general fairness used by the zakat (1 = strongly disagree (2005)
administration system in all zakat-related processes to 5 = strongly agree)
(collection, distribution and procedure) and benefit
received by beneficiaries in exchange of zakat paid
Even though the zakat institution may seem similar Five-Likert scale 6 Mustafa et al. (2013)
to conventional charitable organizations; ideological, (1 = strongly disagree
they are poles apart. Consequently, questions to 5 = strongly agree)
developed were much concerned with the nature of
the Islamic context. The level of Muslim’s trust in the
zakat institution could be established by some
policies, e.g. disclose information on zakat funds,
management reputation, services and using Shariah
in all activities
The behavior to perform responsibility to fulfill the Five-Likert scale 4 Bin-Nashwan et al. (2020b)
obligation of business zakat payments in accordance (1 = strongly disagree
with institution-launched rules and regulations, e.g. to 5 = strongly agree)
paying zakat to the respective institution, continuous
payments and keep in touch with the institution
Entrepreneurs’
compliance
zakat
777
JIABR Frequency
12,5 Variables Categories (n = 274) (%)

Gender Male 241 88

Female 33 12
Age (years) Less than 30 32 12
30–39 75 27
778 40–49 123 45
50 and above 44 16
Education level Up to secondary school certificate 148 54
Diploma certificate 56 20
Bachelor’s degree and above 70 26
Period of business Less than 5 years 51 18
5–10 94 34
11–15 79 30
More than 15 50 18
Type of business Sole proprietorship 229 84
ownership Partnership 32 11
Company 10 4
No response 3 1
zakat paid Paid 100% of the total zakat owing to GDZO 33 12
previously Paid 75% of the total zakat owing to GDZO, and 74 27
Table 3.
25%
Demographic and directly to Asnaf
business Paid 100% of the total zakat due directly to Asnaf 156 57
characteristics of the Did not meet the zakatability conditions 5 2
respondents Other than the categories mentioned 6 2

4.2 Assessment of measurement model

Because the nature of the data collected is self-reported, there may be a risk to the validity of
the results from common method bias (CMB). Thus, by using Harman’s single-factor test, we
found that the single factor has 21.19% of the variance, below the threshold value of 50%.
This denotes that data does not suffer from CMB (Podsakoff et al., 2003). Hair et al. (2010)
suggested testing homoscedasticity as one of the assumptions in which a dependent
variable exhibits equal levels of variance across the range predictor variables. In the present
research, homoscedasticity and independence of error terms were examined by the scatter
plot of dependent variable residuals. We found that no relationship between the residual and
predicted values was revealed (Figure 2).
The scatter plot exhibited no evidence of a non-linear pattern of the residuals, and there was
no sign of a curved pattern of residual dispersion (read from left to right), which might imply a
non-linear relationship. The graph also shows that the residual scores were concentrated at the
center of the zero point, suggesting that the linearity assumption was met (Hair et al., 2010).
The model specified in the present research has six latent variables with reflective
indicators; the path model was assessed by PLS-SEM. The evaluation of the measurement
model (Figure 3) is to test for convergent and discriminant validity. To examine convergent
validity, the items’ loadings, composite reliability (CR), Cronbach’s a, average variance
extracted (AVE) and Dijkstra-Henseler’s r were tested. The findings, as exhibited in
Table 4, show that of the 37 items in the main part of the survey, 30 loadings were above the
conservative threshold value of 0.70; two items loaded between 0.40 and 0.70 were retained
as the values of CR and AVE exceeded the acceptable level (Hair et al., 2017). However, five
items loaded below 0.40 were discarded from the database.
Entrepreneurs’
zakat
compliance

779

Figure 2.
Scatter plot

Figure 3.
Measurement model
of the study
JIABR Constructs Items Loadings a CR AVE Dijkstra-Henseler’s r VIF
12,5
Relig Relig1 0.793 0.903 0.928 0.721 0.916 1.123
Relig2 0.900
Relig3 0.815
Relig4 0.870
Relig6 0.864
780 MorR MorR1 0.701 0.907 0.926 0.644 0.914 1.190
MorR2 0.746
MorR3 0.831
MorR4 0.859
MorR6 0.854
MorR7 0.819
MorR8 0.795
PInfl PInfl1 0.814 0.874 0.910 0.674 0.883 1.384
PInfl2 0.918
PInfl3 0.917
PInfl4 0.773
PInfl5 0.651
SFair SFair1 0.860 0.875 0.905 0.617 0.886 1.145
SFair2 0.849
SFair3 0.772
SFair4 0.808
SFair5 0.654
SFair7 0.750
Trust Trust1 0.789 0.833 0.882 0.600 0.838 1.312
Trust2 0.795
Trust3 0.837
Trust5 0.713
Trust6 0.734
ZComp ZComp1 0.721 0.729 0.831 0.551 0.729
ZComp2 0.739
ZComp3 0.755
ZComp4 0.753
Table 4.
Measurement model Notes: Relig = religiosity; MorR = moral reasoning; PInfl = peer influence; SFair = system fairness;
results ZComp = zakat compliance

At the construct level, the values of a and CR of all latent constructs satisfied the 0.70
criteria (ZComp recorded the lowest value of a [0.729], and CR was 0.831; MorR recorded the
highest values [0.907 and 0.926]). Additionally, the AVE indices of all constructs were well
above 0.50 (Hair et al., 2017). The values of Dijkstra-Henseler’s r were also higher than the
minimum acceptable value of 0.70 for all constructs under study (Hair et al., 2017). A test of
multicollinearity was also carried out to inspect if any construct reflects the variance
inflation factor (VIF) threshold value (3.3). As the pathological values of VIF for the
respective constructs ranged from 1.12 to 1.38, multicollinearity is not a concern. Based on
parameter estimates and statistical significance, it can therefore be deduced that all
measures used in the present research for all variables involved are valid.
It is also necessary to inspect discriminant validity, the extent to which items can
measure different and unique constructs (Hair et al., 2017), here using the heterotrait-
monotrait (HTMT) ratio. The analysis of HTMT for all latent constructs indicated less than
0.90, affirming each construct in the model as unique (Henseler et al., 2015), as the values
reported in Table 5 are within the recommended limits. Overall, based on the statistical
assessments of the measurement model, it can be deduced that the measurement scales used Entrepreneurs’
for constructs of interest are reliable and valid, thus allowing moving forward to assessment zakat
of the structural model.
compliance
4.3 Assessment of structural model
To evaluate the structural model, Hair et al. (2017) proposed the path coefficients ( b )
assessment, t-values, variance explained proportion (R2), effect size levels (f2) and predictive
relevance (Q2). In the present research, the R2 value for the endogenous variable is 0.506.
781
This implies that all the exogenous variables explain 50.6% of the variance in zakat
compliance. The result for R2 thus confirms moderate predictive accuracy. As suggested by
Hair et al. (2017), the model enables the display of predictive relevance if the Q2 value is
above 0. The result shows that the Q2 value for zakat compliance is 0.260, thus confirming
the predictive relevance of zakat payers’ compliance. Meanwhile, the f2 findings as shown in
Table 6 reveal that all the direct and interaction effects have small effect sizes, ranging from
0.020 to 0.127, except that the interaction effect (SFair*Trust -> ZComp) exerts a trivial
effect (0.000).
To estimate all the hypothesized relationships among the latent variables, the present
study performed a bootstrapping technique of 5,000 samples to find the path coefficient’s
significance. In the direct relationships, the results presented in Table 6 show that all effects
of religiosity ( b = 0.191, t = 3.753, p < 0.01), moral reasoning ( b = 0.188, t = 3.808, p < 0.01),
peer influence ( b = 0.272, t = 5.264, p < 0.01), system fairness ( b = 0.133, t = 2.625,
p < 0.01) and trust in institution ( b = 0.294, t = 5.676, p < 0.01) on zakat compliance
behavior are significant. Thus, H1–H5 are supported.
As for the interaction relationships, as shown in Table 6 and Figure 4, all interaction
effects of religiosity  trust ( b = 0.157, t = 3.050, p < 0.01), moral reasoning  trust ( b =
0.104, t = 2.290, p < 0.05) and peer influence  trust ( b = 0.129, t = 2.594, p < 0.01) on zakat
compliance behavior are significant, while system fairness  trust ( b = 0.010, t = 0.221,
p > 0.05) has no effect. Therefore, H6–H8 are supported, while H9 is not.

5. Discussion
The empirical findings demonstrate that religiosity exerts a significant and positive effect
on Muslim entrepreneurs’ decisions to comply with zakat principles. It implies that Muslim
business owners with strong religious faith and commitment, like strictly obey the
obligatory duties (Wajib) such as praying five times a day and fasting the holy month of
Ramadan, practice the optional ritual (Sunnah) and possess virtue (Akhlaq), are highly likely
to comply with zakat rules and regulations. This result corresponds with the argument in
previous research (Abdullah and Sapiei, 2018) that Muslims who practice Islamic values and

Relig MorR PInfl SFair Trust ZComp

Relig
MorR 0.133
PInfl 0.120 0.419
SFair 0.277 0.078 0.191
Trust 0.272 0.112 0.458 0.340
ZComp 0.426 0.409 0.625 0.414 0.623
Table 5.
Notes: Relig = religiosity; MorR = moral reasoning; PInfl = peer influence; SFair = system fairness; Discriminant validity
ZComp = Zakat compliance (HTMT)
JIABR Hypothesized relationship b SD t-value p-value f2 Decision R2 Q2
12,5
Direct effects 0.462 0.260
H1: Relig ! ZComp 0.191 0.052 3.753 0.000 0.066 Accepted
H2: MorR ! ZComp 0.188 0.049 3.808 0.000 0.060 Accepted
H3: PInfl ! ZComp 0.272 0.050 5.264 0.000 0.106 Accepted
H4: SFair ! ZComp 0.133 0.052 2.625 0.004 0.031 Accepted
782 H5: Trust ! ZComp 0.294 0.052 5.676 0.000 0.127 Accepted
Interaction effects 0.506
H6: Relig * Trust ! ZComp 0.157 0.052 3.050 0.001 0.038 Accepted
H7: MorR * Trust ! ZComp 0.104 0.045 2.290 0.011 0.020 Accepted
H8: PInfl * Trust ! ZComp 0.129 0.051 2.594 0.005 0.026 Accepted
H9: SFair * Trust ! ZComp 0.010 0.047 0.221 0.413 0.000 Rejected
Table 6.
Structural model Notes: Relig: religiosity; MorR: moral reasoning; PInfl: peer influence; SFair: system fairness; ZComp: zakat
results compliance

Figure 4.
Structural model of
the study

involve with various religious activities are likely to fulfill their zakat obligation because
they appreciate the values of Islam and tend to internalize expectations and tenets of
their faith.
Likewise, the results of the study manifest the entrepreneurs’ expressed high levels of
moral responsibility to boost their zakat compliance behavior. This confirms the results of
studies by Lisi (2015), which suggest that individuals’ compliance behavior can be explained
by their moral sentiments. Moral consideration can play an important role in building a
positive perception of compliance among zakat payers (business owners). To achieve that,
zakat authorities need to stress the benefits of zakat payment from moral aspects and
inculcate moral values among zakat payers.
 Intriguingly, although being statistically significant, peer influence is negatively related Entrepreneurs’
to zakat compliance. This implies that entrepreneurs’ peers, such as religious leaders or zakat
scholars and business partners, have a negative effect on their decision to comply with the
provisions of zakat law. This interesting result could be traced to the lack of legitimacy for
compliance
the zakat institution, as zakat payers (business owners) may not get the expected benefits
from complying with the rules (e.g. zakat funds may not all be distributed to the destitute).
zakat authorities may consider some strategies, such as positive remarks and good word of
mouth from referent groups by using peers as spokespersons, to encourage payers’ decision-
783
making to comply with the rules.
The perceived fairness of the zakat system was found to have a strong positive
relationship with compliance behavior, and this also was largely reported in taxation
literature (Gilligan and Richardson, 2005; Musimenta et al., 2017). It is useful to
policymakers to improve the areas which may lead to unfavorable attitude toward zakat
system among zakat payers. For instance, allocation of zakat burdens among zakat payers,
the benefits received by zakat beneficiaries from zakat authority in return for zakat paid.
Based on such concerns, perhaps a public advertisement on how zakat funds were spent
could be a helpful mechanism.
The study also found that trust in zakat institutions has a strong and positive association
with entrepreneurs’ zakat compliance. This effect is visibly exhibited by f2 analysis, where
the path has a medium effect of 0.127 among all latent constructs. Given the important
function of trust as an element of survival in Islamic nonprofits, the present study examined
its moderating effect on the relationship between socio-economic motivations of zakat
payers and compliance behavior. It could be deduced from the f2 analysis of the interaction
that trust in zakat institutions is anticipated to strengthen the relationships between
business zakat determinants and compliance, possessing a significantly higher explanatory
power (0.506) than the main effect (0.462) with a magnitude of 0.089.
Interestingly, several significant results also emerged from the moderating role of trust
in the present study. The socio-economic factors can play a pivotal role in explaining zakat
compliance among entrepreneurs, contingent on the levels of trust in the zakat institution.
The rational findings of the study acknowledge that trust, as the basic survival strategy of
zakat institutions, successfully performed as a moderator between religiosity and zakat
compliance. The result of the interaction effect, as illustrated in Figure 5, shows that when
entrepreneurs perceive zakat institutions to be trustworthy, stronger religiosity would
consolidate their compliance behavior with zakat payment. As zakat is a religious obligation
and has to be delegated to a trusted body to well-manage, collect and distribute Zakah
funds, respective authorities should initiate sensitization programs and strategies to build

5
4.5
4
3.5
ZComp

3 Low Trust

2.5 High Trust Figure 5.

2 Trust-moderated
interaction of
1.5
religiosity on zakat
1 compliance
Low Relig High Relig
JIABR trust among Muslims and educate them regarding religious benefit and vital consequences
12,5 of complying with zakat laws.
The present research also postulated that the positive association between moral
reasoning and zakat compliance would be stronger when trust in the zakat institution is
high. As expected, the structural result supported this proposition. The result displays
(Figure 6) that when entrepreneurs perceive the responsible zakat institution is deeply
784 trusted, their high moral sentiments will motivate them to comply with zakat obligation. It
is, therefore, important that zakat authorities seek to inculcate moral values in Muslims for
the significance of paying zakat through the formal authorities. This may first begin with
persistence to gain people’s trust in zakat institutions and their official channels.
Social pressure plays a vibrant role in regulating human behavior and compliance
(Bobek et al., 2013). The present research subjected the negative relationship between the
influence of peers and zakat payers’ compliance with the moderating effect of trust in the
zakat institution. Empirically, the study demonstrates an interesting result from the joint
moderating effect of trust on the negative path between peer pressure and zakat compliance.
The moderating effect changed the strong negative association between the influence of
peers and compliance to significantly positive (Figure 7). This could be explained in light of
social influence theory, that people’s behavior is more likely to be shaped by the tangible
surrounding environment (Bobek et al., 2013; Spicer and Becker, 1980). Instilling trust in
zakat institutions and agencies among the public might have a positive tangible effect on
zakat payers’ reference groups and social surrounding influences.
The research also assumed that the association between system fairness and zakat
compliance is contingent on the levels of trust in zakat institutions. This hypothesis,
however, was rejected as there was a lack of statistical evidence to support it. Although the
proposition was not supported, it is interesting to note that zakat system fairness is an

5
4.5
4
3.5
ZComp

3 Low Trust
Figure 6. 2.5 High Trust
Trust-moderated
2
interaction of moral
reasoning on zakat 1.5

compliance 1
Low MorR High MorR

5
4.5
4
3.5
ZComp

3 Low Trust
Figure 7. High Trust
2.5
Trust-moderated
2
interaction of peer
influence on zakat 1.5

compliance 1
Low PInfl High PInfl
important determinant of zakat compliance behavior irrespective of levels of zakat payers’ Entrepreneurs’
trust in zakat institutions. With the dilemma of compliance and the improvement of zakat zakat
funds in mind, we recommend zakat authorities to proactively engage with the government
in building trust through some promising means, such as all activities of GDZO must rely on
compliance
Shariah, the government must do more than provide raw data on recipients assistance – it
must present information in detailed, simple and easily digestible ways to show zakat
payers what their zakat payment are funding, and pay close attention to the zakat payers’
concerns and keep them in touch regarding zakat authority updates. 785

6. Implications and conclusions

One of the most striking features in the Islamic economic system revolves around the
relevance of zakat and its role as an instrument of socio-economic well-being for all.
Generally, nonprofit managers and scholars recognize that nonprofit organizations,
including zakat institutions, must have the trust of the public for effectiveness, legitimacy
and financial and non-financial support. Other studies on trust, voluntary organizations and
social capital principally view the nonprofits as incubators of trust for their own internal
cohesion. Nevertheless, it could be claimed that there is a disappointing lack of public trust
in the respective zakat institutions in Muslim communities. In Yemen, as in many countries,
low zakat collection is a serious impediment to the smooth functioning of the zakat system.
This is essentially attributed to the low compliance of individuals to pay zakat to the
legitimate authorities.
The present research aims to shed light on the socio-economic determinants influencing
zakat payers’ compliance decisions; it also examines how different levels of trust in zakat
institutions can affect these determinants and thus increase the likelihood of zakat
compliance. The results of the study show that all the direct relationships between business
zakat determinants and compliance have significant effects. All the trust-moderated
interactions are also statistically significant, except for interaction with system fairness.
This research has some profound implications for both theoretical and practical aspects.
Theoretically, the findings enrich the literature on zakat payers’ compliance behavior by
introducing trust in the zakat institution as a moderator variable, playing an important role
in interacting with socio-economic factors to increase compliance. Furthermore, to the best
of the researchers’ knowledge, the present study is one of little research that investigates the
actual compliance behavior of zakat payers, as the existing studies have extensively focused
on behavioral intentions. Unlike the extant literature that has relied primarily on TRA and
TPB, this study shows how a wider empirical approach based on SETRC fits among zakat
payers and gauges their awareness and perception of complying with zakat rules.
In practice, the results of this research can also deliver important information and
guidance for Muslim governments and zakat institutions in developing effective policies and
strategies to improve compliance with zakat rules. The results emphasize the necessity for a
thorough review of the current status of managing and organizing the zakat funds to ensure
rebuilding the public’s trust in all zakat offices and for all the zakat-related processes. They
are signals which could be used by governments to overcome unfavorable attitudes,
behaviors and perceptions of the zakat institution among zakat payers, as well as to restore
their trustworthiness and increase zakat collection from payers; for example, explicit use of
Islamic law (Shariah) in all zakat-related processes, backing by a trustee board made up of
reputable members, disclosure of audited and transparent information on zakat collection
and distribution, and ease of public access.
While the study has achieved its objectives, some limitations might be rectified by future
research. The survey was carried out in Yemen, but to generalize the findings of this
JIABR research future studies could test this compliance model in other Muslim and developing
12,5 countries. Finally, the study used a cross-sectional approach, so findings may differ if a
similar study were to be conducted at different times and in different places. It is
recommended, therefore, that future research may use longitudinal data to capture any
changes in human behaviors over time.

786 References
Abdullah, M. and Sapiei, N.S. (2018), “Do religiosity, gender and educational background influence
zakat compliance? The case of Malaysia”, International Journal of Social Economics, Vol. 45
No. 8, pp. 1250-1264.
Adams, J.S. (1965), “Inequity in social exchange”, Advances in Experimental Social Psychology, Vol. 2,
pp. 267-299.
Alm, J. (1999), “Tax compliance and administration”, Public Administration and Public Policy, Vol. 7
No. 2, pp. 741-768.
Andam, A.C. and Osman, A.Z. (2019), “Determinants of intention to give zakat on employment income:
experience from Marawi city”, Journal of Islamic Accounting and Business Research, Vol. 10
No. 4, pp. 528-545.
Aryee, S., Chen, Z.X. and Budhwar, P.S. (2004), “Exchange fairness and employee performance: an
examination of the relationship between organizational politics and procedural justice”,
Organizational Behavior and Human Decision Processes, Vol. 94 No. 1, pp. 1-14.
Baier, C.J. and Wright, B.R. (2001), “‘If you love me, keep my commandments’: a meta-analysis of the
effect of religion on crime”, Journal of Research in Crime and Delinquency, Vol. 38 No. 1, pp. 3-21.
Becker, G.S. (1968), “Crime and punishment: an economic approach”, Journal of Political Economy,
Vol. 76 No. 2, pp. 169-217.
Bidin, Z., Idris, K.M. and Shamsudin, F.M. (2009), “Predicting compliance intention on zakah on
employment income in Malaysia: an application of reasoned action theory”, Jurnal Pengurusan,
Vol. 28, pp. 85-102.
Bin-Nashwan, S.A., Abdul-Jabbar, H., Aziz, S.A. and Haladu, A. (2020a), “Zakah compliance behavior
among entrepreneurs: economic factors approach”, International Journal of Ethics and Systems,
Vol. 36 No. 2, pp. 285-302.
Bin-Nashwan, S.A., Abdul-Jabbar, H., Aziz, S.A. and Sarea, A. (2020c), “Zakah compliance in Muslim
countries: an economic and socio-psychological perspective”, Journal of Financial Reporting and
Accounting, doi: 10.1108/jfra-03-2020-0057.
Bin-Nashwan, S.A., Abdul-Jabbar, H., Aziz, S.A. and Viswanathan, K.K. (2020b), “A socio-economic
model of zakah compliance”, International Journal of Sociology and Social Policy, Vol. 40 No. 3/4,
pp. 304-320.
Bin-Nashwan, S.A., Abdul-Jabbar, H., Dziegielewski, S.F. and Aziz, S.A. (2021), “Moderating effect of
perceived behavioral control on Islamic tax (zakah) compliance behavior among businessmen in
Yemen”, Journal of Social Service Research, Vol. 47 No. 2, pp. 292-302.
Bobek, D.D. and Hatfield, R.C. (2003), “An investigation of the theory of planned behavior and the role of
moral obligation in tax compliance”, Behavioral Research in Accounting, Vol. 15 No. 1, pp. 13-38.
Bobek, D.D., Hageman, A.M. and Kelliher, C.F. (2013), “Analyzing the role of social norms in tax
compliance behavior”, Journal of Business Ethics, Vol. 115 No. 3, pp. 451-468.
Bos, K., Peters, S.L., Bobocel, D.R. and Ybema, J.F. (2006), “On preferences and doing the right thing:
satisfaction with advantageous inequity when cognitive processing is limited”, Journal of
Experimental Social Psychology, Vol. 42 No. 3, pp. 273-289.
Boulware, L.E., Troll, M.U., Wang, N. and Boulware, L.E. (2007), “Perceived transparency and fairness Entrepreneurs’
of the organ allocation system and willingness to donate organs: a national study”, American
Journal of Transplantation, Vol. 7 No. 7, pp. 1778-1787.
zakat
Braithwaite, V., Smart, M. and Reinhart, M. (2006), “Why young people are less compliant on tax:
compliance
enduring or transient defiance?”, RegNet Occasional Paper No. 11, Regulatory Institutions
Network, Australian National University.
Cavana, R.Y., Delahaye, B.L. and Sekaran, U. (2001), Applied Business Research: Qualitative and
Quantitative Methods, John Wiley and Sons Australia. 787
Coletti, A.L., Sedatole, K.L. and Towry, K.L. (2005), “The effect of control systems on trust and
cooperation in collaborative environments”, The Accounting Review, Vol. 80 No. 2, pp. 477-500.
Cook, K.S. and Hegtvedt, K.A. (1983), “Distributive justice, equity, and equality”, Annual Review of
Sociology, Vol. 9 No. 1, pp. 217-241.
Dularif, M., Sutrisno, T. and Saraswati, E. (2019), “Is deterrence approach effective in combating
tax evasion?”, A Meta-Analysis, Problems and Perspectives in Management, Vol. 17 No. 2,
pp. 93-113.
Federation of Yemen Chambers of Commerce and Industry (FYCCI) (2016), “Annual report. Statistics of
registered business owners with Yemeni Chambers of Commerce and Industry”, available at:
www.fycci-ye.org/ar/
Forsyth, D.R. (1980), “A taxonomy of ethical ideologies”, Journal of Personality and Social Psychology,
Vol. 39 No. 1, pp. 175-184.
Gilligan, G. and Richardson, G. (2005), “Perceptions and tax compliance behavior in Australia and
Hong Kong – a preliminary study”, Journal of Financial Crime, Vol. 31 No. 1, pp. 11-67.
Hair, J.F., Hult, G.T., Ringle, C.M. and Sarstedt, M. (2017), A Primer on Partial Least Squares Structural
Equation Modeling (PLS-SEM), 2nd ed., Sage Publications, London.
Hair, J.F., William, C., Babin, B.J. and Anderson, R.E. (2010), Multivariate Data Analysis, 7th ed.,
Prentice Hall, Upper Saddle River, NJ.
Henseler, J., Ringle, C.M. and Sarstedt, M. (2015), “A new criterion for assessing discriminant validity in
variance-based structural equation modeling”, Journal of the Academy of Marketing Science,
Vol. 43 No. 1, pp. 115-135.
Ho, D., Ho, D.C. and Young, A. (2013), “A study of the impact of culture on tax compliance in China”,
International Tax Journal, Vol. 39 No. 3, pp. 33-44.
Idris, K.M., Ali, E. and Ali, J. (2003), “The role of intrinsic motivational factors on compliance behaviour
of zakat on employment income”, Jurnal Pembangunan Social, Vol. 6 No. 7, pp. 95-122.
Jimenez, P. and Iyer, G.S. (2016), “Tax compliance in a social setting: the influence of social norms, trust
in government, and perceived fairness on taxpayer compliance”, Advances in Accounting,
Vol. 34, pp. 17-26.
Kashif, M., Jamal, K.F. and Rehman, M.A. (2018), “The dynamics of zakat donation experience among
Muslims: a phenomenological inquiry”, Journal of Islamic Accounting and Business Research,
Vol. 9 No. 1, pp. 45-58.
Kohlberg, L. (1969), “Stage and sequence: the cognitive-developmental approach to socialization”, in
Goslin D.A. (Ed.), Handbook of Socialization Theory, IL, Rand McNally, Chicago.
Leventhal, G.S. (1980), “What should be done with equity theory? New approaches to the study of
fairness in social relationships”, in Gergen, K., Greenberg, M. and Willis R. (Eds), Social
Exchange: Advances in Theory and Research, Plenum, New York, NY, pp. 27-55.
Lisi, G. (2015), “Tax morale, tax compliance and the optimal tax policy”, Economic Analysis and Policy,
Vol. 45, pp. 27-32.
Mitchell, V. (1999), “Consumer perceived risk: conceptualisations and models”, European Journal of
Marketing, Vol. 33 Nos 1/2, pp. 163-195.
JIABR Mohdali, R. and Pope, J. (2014), “The influence of religiosity on taxpayers’ compliance attitudes:
empirical evidence from a mixed-methods study in Malaysia”, Accounting Research Journal,
12,5 Vol. 27 No. 1, pp. 71-91.
Murphy, K. (2009), “Procedural justice and affect intensity: understanding reactions to regulatory
authorities”, Social Justice Research, Vol. 22 No. 1, pp. 1-30.
Musimenta, D., Nkundabanyanga, S.K., Muhwezi, M., Akankunda, B. and Nalukenge, I. (2017), “Tax
compliance of small and medium enterprises: a developing country perspective”, Journal of
788 Financial Regulation and Compliance, Vol. 25 No. 2, pp. 149-175.
Mustafa, M.O., Mohamad, M.H.S. and Adnan, M.A. (2013), “Antecedents of zakat payers’ trust in an
emerging zakat sector: an exploratory study”, Journal of Islamic Accounting and Business
Research, Vol. 4 No. 1, pp. 4-25.
Pallant, J. (2013), SPSS Survival Manual, McGraw-Hill Education (UK).
Passini, S. (2010), “Moral reasoning in a multicultural society: moral inclusion and moral exclusion”,
Journal for the Theory of Social Behaviour, Vol. 40 No. 4, pp. 435-451.
Piaget, J. (1932), The Moral Judgment of the Child, The Free Press, New York, NY.
Podsakoff, P.M., Mackenzie, S.B., Lee, J. and Podsakoff, N.P. (2003), “Common method biases in
behavioral research: a critical review of the literature and recommended remedies”, Journal of
Applied Psychology, Vol. 88 No. 5, pp. 879-903.
Posner, E.A. (2000), “Law and social norms: the case of tax compliance”, Virginia Law Review, Vol. 86
No. 8, pp. 1781-1819.
Rettinger, D.A. and Jordan, A.E. (2005), “The relations among religion, motivation, and college
cheating: a natural experiment”, Ethics and Behavior, Vol. 15 No. 2, pp. 107-129.
Sargeant, A. and Lee, S. (2002), “Improving public trust in the voluntary sector: an empirical analysis”,
International Journal of Nonprofit and Voluntary Sector Marketing, Vol. 7 No. 1, pp. 68-83.
Schultz, C., Einwiller, S., Seiffert, Brockmann, J. and Weitzl, W. (2019), “When reputation influences
trust in nonprofit organizations. The role of value attachment as moderator”, Corporate
Reputation Review, Vol. 22 No. 4, pp. 159-170.
Sniehotta, F.F., Presseau, J. and Araújo-Soares, V. (2014), “Time to retire the theory of planned
behaviour”, Health Psychology Review, Vol. 8 No. 1, pp. 1-7.
Spicer, M.W. and Becker, L.A. (1980), “Fiscal inequity and tax evasion: an experimental approach”,
National Tax Journal, Vol. 33 No. 2, pp. 171-175.
Stack, S. and Kposowa, A. (2006), “The effect of religiosity on tax fraud acceptability: a cross-national
analysis”, Journal for the Scientific Study of Religion, Vol. 45 No. 3, pp. 325-351.
Sutinen, J.G. and Kuperan, K. (1999), “A socio-economic theory of regulatory compliance”, International
Journal of Social Economics, Vol. 26 Nos 1/2/3, pp. 174-193.
Tajuddin, T.S., Azman, A.S. and Shamsuddin, N. (2016), “Zakah compliance behaviour on income
among Muslim youth in Klang valley”, Jurnal Syariah, Vol. 24 No. 3, pp. 445-464.
The General Directorate of Zakah Obligations (GDZO) (2010), “Law no. (2) of 1999 concerning zakah”,
available at: http://yemen-lo.blogspot.my/2014/06/blog-post_1083.html
The General Directorate of Zakah Obligations (GDZO) (2016), Annual Report of Zakah Resources,
GDZO Central Office, Sana’a, Yemen.
Thibaut, J. and Walker, L. (1978), “A theory of procedure”, California Law Review, Vol. 66 No. 3,
pp. 541-566.
Tlemsani, I. and Matthews, R. (2013), “zakat and the elimination of poverty: new perspectives”,
International Journal of Information Technology and Business Management, Vol. 9 No. 1, pp. 54-69.
Tlemsani, I. and Matthews, R. (2020), “zakat and social capital: thoughts on modernism,
postmodernism, and faith”, Journal of Management, Spirituality and Religion, Vol. 18 No. 1,
doi: 10.1080/14766086.2020.1841673.
Torgler, B. (2003), “Tax morale: theory and empirical analysis of tax compliance”, PhD thesis. Entrepreneurs’
Unpublished Doctoral Thesis, Universität Zürich.
zakat
Torgler, B. (2004), “Moral suasion: an alternative tax policy strategy? Evidence from a controlled field
experiment in Switzerland”, Economics of Governance, Vol. 5 No. 3, pp. 235-253. compliance
Torgler, B. (2006), “The importance of faith: tax morale and religiosity”, Journal of Economic Behavior
and Organization, Vol. 61 No. 1, pp. 81-109.
Vitell, S.J., Bing, M.N., Davison, H.K., Ammeter, A.P., Garner, B.L. and Novicevic, M.M. (2009),
“Religiosity and moral identity: the mediating role of self-control”, Journal of Business Ethics,
789
Vol. 88 No. 4, pp. 601-613.
Wahab, N.A. and Rahman, A.R.A. (2011), “A framework to analyse the efficiency and governance of
zakat institutions”, Journal of Islamic Accounting and Business Research, Vol. 2 No. 1, pp. 43-62.
Welch, M.R., Xu, Y., Bjarnason, T., Petee, T., O’Donnell, P., Magro, P. (2005), “‘But everybody does it. . .’:
the effects of perceptions, moral pressures, and informal sanctions on tax cheating”, Clinical
Rehabilitation, Vol. 24 No. 12, pp. 1136-1143.
Wenzel, M. (2005), “Misperceptions of social norms about tax compliance: from theory to intervention”,
Journal of Economic Psychology, Vol. 26 No. 6, pp. 862-883.
Zaheer, A. and Venkatraman, N. (1995), “Relational governance as an interorganizational strategy: an
empirical test of the role of trust in economic exchange”, Strategic Management Journal, Vol. 16
No. 5, pp. 373-392.

Corresponding author
Saeed Awadh Bin-Nashwan can be contacted at: s.nashwan233@gmail.com
JIABR Appendix 1
12,5

790