Zakat compliance behavior in formal zakat institutions: An integration model of religiosity, trust, credibility, and accountability

Abstract

Indonesia boasts the largest Muslim population worldwide; however, the allocation of zakat funds remains relatively low. This is primarily due to the fact that numerous Muslim communities have yet to channel their zakat contributions through formal institutions. Many individuals are still unaware of their obligation to pay zakat. Previous research has predominantly employed theoretical frameworks in consumer behavior, with limited emphasis on formal zakat institutions. Consequently, there is a scarcity of socialization and counseling initiatives pertaining to formal zakat institutions within the community. Therefore, the objective of this study is to develop a model for understanding zakat compliance behavior within formal zakat institutions, with a focus on the variables of religiosity, trust, credibility, and accountability. This investigation seeks to provide a comprehensive and in-depth comprehension of the topic. The study employs a quantitative research design, utilizing the Structural Equating Modeling (SEM) method. A total of 346 respondents, categorized as Muslim citizens obligated to pay zakat, were included in the sample. The study findings indicate that accountability and credibility significantly influence trust, whereas trust and religiosity impact zakat compliance behavior. Notably, trust emerges as the most influential variable regarding compliance with zakat payments within formal zakat institutions. Conversely, the variable of religiosity exerts the weakest impact on compliance with zakat payments in formal institutions. These findings suggest that zakat institutions should prioritize the credibility variable to enhance the trust of zakat payers, thereby increasing compliance with zakat payments.