ADMINISTRATION OF BAITULMAL OF FEDERAL

TERRITORIES: ITS PRACTICES AND CHALLENGES

BY

LIYANA AL-HANY BINTI ABDUL HALIM

A dissertation submitted in fulfilment of the requirement for

the degree of Master of Comparative Law

Ahmad Ibrahim Kulliyyah of Laws

International Islamic University Malaysia

SEPTEMBER 2014

ii

ABSTRACT

Baitulmal is a primary financial institution in the era of Prophet (s.a.w) and his

companions. However, in Malaysia, the definition of Baitulmal has been narrowed to

very limited sources. Nevertheless, the role of Baitulmal is abandoned and reduced

into small units under the patronage of Islamic Religious Council. Besides, the

existence of several institutions similar to Baitulmal has denied its right to receive

funds. Being a treasury, Baitulmal ought to be placed in the prime structure of the

administrative system of Malaysia. Hence, this study focused a string of legal

constraints that could hinder the successful administration of Baitulmal in the Federal

Territories. This study examined matters relating to Baitulmal of Federal Territories

administered by the Islamic Religious Council of Federal Territories as a lawful entity

that has a legal enforcement through the federal laws of Malaysia and also sharīah

laws. It focused on the suggestions to standardize the distribution of asset into new

sources and the management of the asset. Besides it also includes the suggestion to

strengthen the institutions of Baitulmal to be independent Statutory Body which has

its own rules and regulations in conducting its role in collecting, managing and

distributing the sources of the Islamic country. This study was conducted as legal

research analysing primary and secondary documents. Interviews were also conducted

with the relevant authority to support the findings of the study. This research found

that the existing provisions relating to the administration of Baitulmal of Federal

Territories are inadequate to enhance its management in collecting and distributing

Baitulmal sources. Therefore this study suggests that relevant laws should be amended

to give specific starting to Baitulmal under the Federal Constitution, National Land

Code, Unclaimed Monies Act 1965 and Administration of Islamic Law (Federal

Territories) Act.

iii

بحثلا ملخص

كان بيت الدال في عهد النبي صلى الله عليو وسلم والصحابة الكرام مؤسسة مالية رئيسية. ومكانتو كخزانة مالية إسلامية يستلزمو أن يكون على ىيئة أولية في الدولة. وبالرغم ذلك فان

مصادر لزدودة وأن دوره قد جنب وصغر الى عناصر بيت الدال في ماليزيا قد صغر تعريفو الى صغيرة تحت لرالس إسلامية للولايات ومع ذلك أن ىناك بعض مؤسسات مشابهة لبيت الدال تنافي حقوقو في جباية الرصائد. وىذا لا يناسب مكانتو كالخزانة الدالية الأولية الذي

لذلك فان ىذا البحث يركز على و .يجب أن يكون على ىيئة رئيسية لنظام اداري في ماليرياالعوائق القانونية التي تعرقل دون نجاح ادارة بيت الدال في الولاية الفدرالية. ىذا البحث يمعن النظر على الأمور الدتعلقة ببيت الدال للولاية الفدرالية التي تحت اشراف المجلس الآسلامية

قانونية من خلال القوانين الداليزية وقوانين للولاية كالدؤسسة الدعتبرة تملك الحقوق التنفيذية الواىتم البحث على اقتراح لتنظيم توزيع الرصائد الى الجوانب الدستحقة . الشريعة الاسلامية

وادارتها الفعالة. وأيضا الإقتراح لتقوية مؤسسة بيت الدال كهيئة قانونية مستقلة ذات قوانينو الإدارة والتوزيع لدصادر الدولة الاسلامية.والذدف الخاصة ونظامو على تنفيذ دوره في الجمع و

الرئيسي لذذا البحث ىو التمحيص في بحث القوانين والوثائق الدتعلقة. وأما الدقابلات فقد جرت مع الفئات التنفيذية الدتعلقة لتشديد حصائد البحث. قد استنتج البحث أن القوانين

ية الفدرالية غير كافية لرفع مستوى الادارة وتحسينها الدوجودة الدتعلقة بادارة بيت الدال في الولاأنو ينبغي تعديل القوانين ذات الصلة إعطاء بداية لذا تقترح ىذا البحث في الجباية والتوزيع.

وقانون الأموال غير ، وقانون الأراضي الوطنية، الولاية الفدرالية لزددة لبيت مال تحت (.الفدراليةارة الإسلامي" )الأقاليم وقانون "الإد 5691الدطالب بها عام

iv

APPROVAL PAGE

I certify that I have supervised and read this study and that in my opinion; it conforms

to acceptable standards of scholarly presentation and is fully adequate, in scope and

quality, as a dissertation for the degree of Master of Comparative Law.

......................................................

Tajul Aris Ahmad Bustami

Supervisor

I certify that I have read this study and that in my opinion it conforms to acceptable

standards of scholarly presentation and is fully adequate, in scope and quality, as a

dissertation for the degree of Master of Comparative Law.

......................................................

Mohamad Asmadi Abdullah

Examiner

This dissertation was submitted to the Department of Islamic Law and is accepted as a

fulfilment of the requirement for the degree of Master of Comparative Law.

..…................................................

Mohd. Hisham Mohd. Kamal

Head, Department of Islamic Law

This dissertation was submitted to the Ahmad Ibrahim Kulliyyah of Laws and is

accepted as a fulfilment of the requirement for the degree of Master of Comparative

Law.

………..........................................

Hunud Abia Kadouf

Dean, Ahmad Ibrahim Kulliyyah

of Laws

v

DECLARATION

I hereby declare that this dissertation is the result of my own investigations, except where

otherwise stated. I also declare that it has not been previously or concurrently submitted as

a whole for any other degrees at IIUM or other institutions.

Liyana Al-hany binti Abdul Halim

Signature …………..………………….. Date ……………………............

vi

INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

DECLARATION OF COPYRIGHT AND AFFIRMATION

OF FAIR USE OF UNPUBLISHED RESEARCH

Copyright © 2014 by Liyana Al-hany binti Abdul Halim. All rights reserved.

ADMINISTRATION OF BAITULMAL IN FEDERAL

TERRITORIES: ITS PRACTICES AND CHALLENGES

No part of this unpublished research may be reproduced, stored in a retrieval system, or

transmitted, in any form or by any means, electronic, mechanical, photocopying,

recording or otherwise without prior written permission of the copyright holder except as

provided below.

1. Any material contained in or derived from this unpublished research may only

be used by others in their writing with due acknowledgement.

2. IIUM or its library will have the right to make and transmit copies (print or

electronic) for institutional and academic purposes.

3. The IIUM library will have the right to make, store in a retrieval system and

supply copies of this unpublished research if requested by other universities

and research libraries.

Affirmed by Liyana Al-hany binti Abdul Halim .

………………………… ..……………….

Signature Date

vii

This thesis is specially dedicated to my beloved husband, Mohd Farihal bin Osman and

my son Amjad Alhany, Amani Madani Alhany and Alia Madani Alhany whom, without

their love, sacrifice, understanding, patience and encouragement, this would not have

been possible.

It also goes also to my father, Haji Abdul Halim bin Mohamad; my mother, Hajjah

Norizan binti Mohd Baki and my brothers Mohd Saifullah Alhany, Ikhwan Alhany,

Ashraful Alhany, and my sisters Syazana Alhany, Nurul Jannah Alhany and Zahratulmuna

Alhany and also my mother in law Mariah binti Hassan and Haji Osman bin Puteh for

their full support, love, du„ā and care. May Allah, the Almighty, bless and grant upon

them mercy forever and ever.

viii

ACKNOWLEDGEMENTS

All praise and worships belong to Allah, the All-Knowing. May His peace and

blessings be showered upon the soul of Prophet Muhammad (SAW), the classical

prestigious model for mankind.

Firstly, I thank you Allah for everything. The journey towards the completion

of my Master of Comparative Laws programme has been dotted with so many arduous

yet meaningful stories, from the time when I was starting to built a family and married

with one son and recently became a mother of one son and two daughters; as a part

time student and at the same time as legal officer in Universiti Utara Malaysia being

the source of income for my living and the tuition fees. Alhamdulillah, Allah grants

me the opportunity, ability, capability, assistance, facility, patience and perseverance

from the beginning until I am able to complete the coursework as well as this research

under the programme after a long six years. Allahummalaka al-hamdukulluhu.

I would like to take this opportunity to thank IIUM for providing the learning

opportunity, infrastructure and facilities for me and others to pursue higher level of

education; particularly all the lecturers who had taught me with abundance of

knowledge and experience during the course of the program.

My utmost gratitude and appreciation goes to Assistant Professor Dr. Tajul

Aris bin Ahmad Bustami who willingly, understandingly and thoughtfully supervised

and guided me consistently towards undertaking this research and its completion. His

exposure in the subject matter area has facilitated me a lot.

I must also thank my dear husband for his daily life care, support,

understanding and assistance especially in assisting me to understand and apprehend

the subject matter of the research. Without his assistance and ideas, my effort towards

this research will not be as productive. May Allah reward you abundantly.

I would specially express my wholehearted appreciation to my parents and my

in laws for their full encouragements, support and love. They have jointly been the

source of inspiration that drives me to work harder.

I would also like to express my sincere gratitude to the following individuals

for their kindest assistance and advice, which made the completion of this thesis

possible. They are the interviewees for this research; Encik Wan Mohd Sanusi bin

Mohd Noor, legal officer of MAIWP and Mr. Faridilatras, an officer of Baitulmal

division of MAIWP. Also to others who provided technical and moral support; Sis

Mizan, Sis. Niza, Sis Juhanis, Bro. Aslam, as well as my MCL classmates.

I would also like to express my earnest thanks to my employer in Universiti

Utara Malaysia, namely Mr. Md Rejab bin Md Desa and Madam Mahani binti Salleh

and all my clique in legal unit who give full support and understand my situation as a

part time student in IIUM. To you all, I conclude by beseeching Allah to reward you:

Jazākumullāhukhayran fi ad-dunyā wa al-ākhirah!

ix

TABLE OF CONTENTS

Abstract .................................................................................................................... ii Abstract in Arabic .................................................................................................... iii Approval Page .......................................................................................................... iv Declaration ............................................................................................................... v Copyright Page......................................................................................................... vi

Dedication ................................................................................................................ vii

Acknowledgements .................................................................................................. viii List of Tables ........................................................................................................... xii List of Statutes ......................................................................................................... xiii List of Abbreviations ............................................................................................... xiv

Transliteration .......................................................................................................... xv

CHAPTER ONE: INTRODUCTION ................................................................. 1 1.0 Research Background............................................................................. 1 1.1 Statement of Problem ............................................................................. 4 1.2 Research Objectives ............................................................................... 5 1.3 Hypothesis .............................................................................................. 6

1.4 Scope of Research .................................................................................. 6 1.5 Literature Review ................................................................................... 7

1.6 Research Methodology........................................................................... 11 1.7 Table of Content ..................................................................................... 12

CHAPTER TWO: THE CONCEPT AND LEGAL BASIS OF

BAITULMAL .......................................................................................................... 14 2.0 Introduction ............................................................................................ 14 2.1 Definition .............................................................................................. 14

2.1.1 Literal Definition of Baitulmal .................................................... 14 2.1.2 Technical meaning of Baitulmal.................................................. 15

2.2 Legal Basis of Baitulmal ....................................................................... 18 2.2.1 Baitulmal in al-Qur‟ān ................................................................. 18

2.2.2 Baitulmal in the ḥadīth of Prophet (s.a.w.) ................................. 22 2.3 Types of Baitulmal ................................................................................ 23

2.3.1 General Baitulmal ........................................................................ 23

2.3.2 Muslimin Baitulmal ..................................................................... 24 2.3.3 Specific Baitulmal ....................................................................... 25

2.4 Conclusion ............................................................................................ 26

CHAPTER THREE: HISTORICAL DEVELOPMENT OF BAITULMAL

IN ISLAM ............................................................................................................... 27 3.0 Introduction ........................................................................................... 27

3.1 Baitulmal during the Period of the Prophet (s.a.w.).............................. 27 3.1.1 The Establishment of Baitulmal .................................................. 29

3.1.2 The Administration of Baitulmal ................................................. 31 3.1.3 The Policy of Collecting and Distributing Baitulmal Sources .... 32

x

3.2 Baitulmal during the Period of Abū Bakr as-Ṣiddīq (11-13 H/632-634

A.C) .............................................................................................................. 33 3.2.1 The Administration of Baitulmal ................................................. 34

3.2.2 The Policy of Collecting and Distributing Baitulmal Sources .... 35 3.3 Baitulmal during the Period of „Umar al-Khattāb (13-23 H/634-644

A.C) .............................................................................................................. 36 3.3.1 The Establishment of Institution of Baitulmal ............................ 36 3.3.2 The Administration of Baitulmal ................................................. 37

3.3.3 The Policy of Collecting and Distributing Baitulmal Sources .... 39 3.4 Baitulmal during the Period of „Uthmān al-Affān (23-35 H/644-656

A.C) .............................................................................................................. 41 3.4.1 The Administration of Baitulmal ................................................. 41 3.4.2 The Policy of Collecting and Distributing Sources of Baitulmal 42

3.5 Baitulmal during the Period of „Alī ibn Abi Ṭālib (35-40 H/ 656-661

A.C) .............................................................................................................. 43

3.5.1 The Administration of Baitulmal ................................................. 43 3.5.2 The Policy of Collecting and Distributing Baitulmal Sources .... 44

3.6 Baitulmal during the Period of Banī Umayyah .................................... 44 3.6.1 Baitulmal during the Period of al- Walīd Ibn „Abd al-Mālik ..... 45

3.6.1.1 The Improvement of Baitulmal: The Introduction of Tax

Department ..................................................................................... 45

3.6.1.2 Developments from Baitulmal Expenses ........................... 46 3.6.2 Baitulmal during the Period of „Umar „Abd al-Azīz ................... 47

3.6.2.1 The Administration of Baitulmal ....................................... 47

3.6.2.2 The Policy of Collecting and Distributing Baitulmal

Sources ........................................................................................... 48

3.7 Baitulmal during the Period of Banī „Abbāsiyyah ................................ 49 3.7.1 Caliph al-Mahdī ........................................................................... 50

3.7.2 Caliph Harun al-Rashid (766- 809AD) ....................................... 50 3.8 Conclusion ............................................................................................ 51

CHAPTER FOUR: THE HISTORICAL DEVELOPMENT OF BAITUMAL

IN THE FEDERAL TERRITORIES OF KUALA LUMPUR .......................... 53 4.0 Introduction ........................................................................................... 53 4.1 Pre- Colonial Period of Malaya ............................................................ 54

4.2 Colonial Period of Malaya .................................................................... 56 4.3 Post Independence Malaya until Present .............................................. 58

4.3.1 Baitulmal and its relation to the Federal Constitution ................. 60 4.3.2 Baitulmal and and its relation to the State Constitution .............. 62 4.3.3 Baitulmal and its relation to Administration of Islamic Law

(Federal Territories) Act 1993 .............................................................. 64

4.4 Conclusion ............................................................................................ 65

CHAPTER FIVE: BAITULMAL IN THE FEDERAL TERRITORIES OF

KUALA LUMPUR: ITS LEGAL STATUS AND LEGAL CONSTRAINTS .. 67 5.0 Introduction ........................................................................................... 67 5.1 The Organisational structure of Majlis Agama Islam Wilayah

Persekutuan (MAIWP) ................................................................................. 68 5.2 The Objectives of the MAIWP ............................................................. 70

xi

5.3 The Administration of Baitulmal in the Federal Territories of Kuala

Lumpur ......................................................................................................... 71 5.4 Legal Constraints in the Administration of Baitulmal in Kuala

Lumpur ......................................................................................................... 73

5.5 Collection and Distribution of Baitulmal Assets .................................. 80 5.5.1 Sources of Baitulmal in Federal Territories ................................ 80 5.5.2 Methods of collecting and distributing of Baitulmal Assets in

Federal Territories Kuala Lumpur ........................................................ 81 5.5.2.1 Methods of collecting Baitulmal Assets in Federal

Territories Kuala Lumpur .............................................................. 81 5.5.2.2 Methods of distributing Baitulmal Asstes in Federal

Territories Kuala Lumpur .............................................................. 82 5.6 Conclusion ............................................................................................. 92

CHAPTER SIX: CONCLUSION ........................................................................ 93 6.1 The Basis of Baitulmal .......................................................................... 93

6.2 The Concept of Baitulmal ..................................................................... 94 6.3 The Concept of Baitulmal in Malaysia ................................................. 95 6.4 The Administration of Baitulmal of Federal Territories ....................... 96

BIBLIOGRAPHY .................................................................................................. 99

xii

LIST OF TABLES

Table No. Page No.

‎5.1 Had al-kifayah for individual recipients in Federal Territories 92

xiii

LIST OF STATUTES

Administration of Islamic Law (Federal Territories) Act 1993 [Act 505]

Administration of Religion of Islam (State of Selangor) Enacment 2003

Federal Constitution

Land Acquisition Act 1960 [Act 486]

Local Government Act 1976 [Act 171]

Rules of Baitulmal (Federal Territories) 1980 (Amendment)

Selangor State Constitution 1959

Undang-undang Pelabuhan Kedah

Unclaimed Monies Act 1965 [Act 370]

xiv

LIST OF ABBREVIATIONS

JAWHAR Jabatan Wakaf, Haji dan Zakat

MAIWP Islamic Religious Council of Federal Territories

MAIN Islamic Religious Council

NLC National Land Code

s.a.w. Peace be upon him

xv

TRANSLITERATION

N ن Gh غ Sh ش kh خ Aa ء H ه F ف ṣ ص D د B ب W و Q ق ḍ ض dh ذ T ت

Y ي K ك ṭ ط r ر Th ث

L ل ẓ ظ z ز J ج

M م „ ع s س ḥ ح

Short Vowels Long Vowels a ١ + ā i ي + ī

u و + ū

1

CHAPTER ONE

INTRODUCTION

1.0 RESEARCH BACKGROUND

The institution of Baitulmal1 has existed long ago since the period of Prophet Yūsuf

(a.s) which is known as khazāin al-ard.2 It is explained in al-Qurān as a treasury

managed by the Prophet Yūsuf (a.s) who acted as a governor of Egypt. He had

distributed the property of Baitulmal to the needy people during their difficult times.

In addition, during the period of jahiliyyah, the concept of Baitulmal can be seen in

the reign of Arab Quraish through the body of Dārul Nadwah. It has several portfolio

among them were Majlis al-Siqāyah, Majlis al-Rifādah and Majlis al-Khazānah that

provided sustenance for the guests of holy land during pilgrimage period.3

Indeed, during the period of the Prophet Muhammad (s.a.w.) the concept of

natural justice and welfare was always applied particularly after the establishment of

the first Islamic state in Madīnah. During that time, the command on the obligation to

pay zakāt with certain nisāb4 was sent down to the Prophet (s.a.w.) and to the

Muslims. However, the word of Baitulmal was not formally used since the properties

during the Prophet‟s time were not kept in a long time and as it was distributed

immediately to the people. The practise was continually exercised by the ṣahābah

until the word of Baitulmal was formally used during the period of „Umar al-Khattāb.

1 The writer chooses the word „Baitulmal‟ in this writing since it is used in item 1, State List of Ninth

Schedule of Federal Constitution. However, the spelling of „Baitul-Mal‟ is also used in item 97(3) of

Federal Constitution. 2 Al-Qurān al-Karīm, Sūrah Yūsuf, 12: 55.

3 Juraish Kamaruddin, “Pemerkasaan Entiti dan Sumber Perbendaharaan Baitulmal Melalui Dinamika

Muamalat dan Undang-Undang Syariah”, in Baitulmal: Masihkah Relevan? Prosiding Konvensyen

Baitulmal Kebangsaan 2009, edited by Sohaimi Mohd Salleh, Rokhoun Nafsiah Abd. Rashid and

Hasan Hafizi Hanapi (Kuala Lumpur: Jabatan Wakaf, Zakat dan Haji (JAWHAR), 2009), at 176. 4 Nisāb means certain portion ascertained to somebody based on hukm sharā.

2

Nonetheless, Baitulmal system witnessed its golden era during the period of „Umar

„Abdul Azīz because of his good governance and systematic management of

Baitulmal which led to the stability of the society. During his period, there was no

problem of poverty and the people lived in solidarity and harmony. Hence, the

concept of Baitulmal in early Islam was not only known as a Baitulmal or national

treasury of Islamic state but also as an incorporated fiscal system in the society.5 The

fiscal economy is regarded as the expenses, tax sources and government debt in order

to obtain national economic goal.6

Apparently, Baitulmal could be seen as an institution that was responsible to

control the national treasury, in the form of determining the expenditures of the

country, tax collection and also national debt. In fact, the Baitulmal also acted as a

treasury which designed and dispersed society‟s wealth in the whole socio-economic

and political set-up of the nation. Thus, it was the economic pulse to the development

process of the nation.

The existence of the institution of Baitulmal could be referred from the

primary sources of Sharī„ah that are al-Qurān and al-Sunnah. The administration and

management of Baitulmal could be seen from the historical development of each

period starting fro the period of Prophet (s.a.w.) until the period of Banī „Abbāsiyyah.

This is to understand the real concept of Baitulmal established during those periods.

Besides, the writer also looks into the historical development of Baitulmal in Malaysia

from legal perspectives. Hence, the Islamic civilization of history shows that

5 Aidit Ghazali, Development: An Islamic Perspective, (Kuala Lumpur: Pelanduk Publication, 1990), at

46. 6 R.L. Miller and R.W.Pulsinelli, Modern Money and Banking, (Singapore: McGraw Hill Book.Co.,

1989), at 476.

3

Baitulmal that was administered efficiently and systematically will lead to

stabilisation of economy and ensured the living status of the society.7

On the other hand, the idea of establishing the Baitulmal as national treasury is

one of the frequently discussed issues by several researchers.8 Since focus is to

establish Baitulmal as practised during the period of Prophet Muhammad (s.a.w.) and

early Islam, the writer feels that there is a necessity to research the administration of

Baitulmal particularly in the Federal Territories and the challenges faced by the

Baitulmal from the legal point of view. The writer chooses to make a research on

Baitulmal of Federal Territories due to its successful activities in helping the aṣnāf.9

The establishment and administration of one organisation must be based on its

rules and regulations. In this case, the Baitulmal of Federal Territories is governed by

the Administration of Islamic Laws of Federal Territories 1993 and the Rules of

Baitulmal 1980 which is amended in 1990. In this research, the writer tries also to

look into the methods used by the Baitulmal of Federal Territories in administering

and distributing the Baitulmal sources legally. Furthermore, the writer tries to focus on

legal constraints faced by the Baitulmal of Federal Territories particularly in playing

its role and function to the public at large.

7 „Umar „Abdul „Azīz is one of the Umayyad Caliphs who emphasised on the ethical aspects of

education in order to turn the hearts of people towards charity, forbearance and munificence. He

persistently discouraged and punished laxity of morals. All these beneficial measures led to the stability

of the State and the prosperity of the people who lived in peace and solidarity. During his short reign of

two years, people had grown so prosperous and contented that one could hardly find a person who

would accept aids and alms. 8 See for example Hailani Muji Tahir, “Islamic Budgetary Policy: In Theory and Practice,” Ph.D thesis,

University of Aberdeen, 1988), 42. 9 Aṣnāf refers to people who are eligible for zakāt which consist of fakīr, poor, „amil, convert, al-Riqāb,

al-gharimin, fi-sabilillah, and Ibn Sabil as mentioned in al-Qurān al-Karīm sūrah al-Taubah, 9: 60.

4

1.1 STATEMENT OF PROBLEM

The following statement of problems would help in analyzing the administration of

Baitulmal in Federal Territories:

1) In Federal Constitution, Article 97(3) explains that the Baitulmal or

similar Islamic religious revenues must be formed under different

Consolidated Fund from State Consolidated Fund and Federal

Consolidated Fund. The Baitulmal sources are mentioned in section 60 of

the Administration of Islamic Laws (Federal Territories) Act 1993 that the

properties are from the properties mentioned by ḥukm syarā. Even though

Article 97(3) providing on separated fund for Islamic revenues, there is no

specific provision in the Federal Constitution on Baitulmal Consolidated

Fund. The absence of specific provision may result with different

interpretation itself.

2) The administration of Baitulmal of Federal Territories is governed by the

Administration of Islamic Laws (Federal Territories) Act 1993. Baitulmal

sources such as land are also governed under the National Land Code

1965 (NLC). However, there is no specific provision provided pertaining

to awqāf land in the said Code. Problems may occurs in enforcing the

implementation of awqāf land due to loopholes in the said Act.

3) The sources of Baitulmal consist of properties mentioned in ḥukm sharā.

The unclaimed money and unclaimed Muslim properties are also

considered as Baitulmal sources Fund. The unclaimed money or properties

of Muslims is also subjected to the Unclaimed Moneys Act 1965. Under

“Muzakarah Jawatankuasa Fatwa Kebangsaan Kali ke-27” the members

decided that all unclaimed Moneys of the Muslim depositors should be

5

transferred to Baitulmal not to Registrar of Uclaimed Money. Under

section 11 of Unclaimed Moneys Act, the Accountant General must credit

all unclaimed money to the Consolidated Trust Fund. After fifteen years

expired from the date the unclaimed money credited to Consolidated Fund

and no payment is made from the said account, then the unclaimed money

will be transferred to Federal Consolidated Revenue Account. The

problem occurs when the said provision also includes the Muslim

depositors. This is contrary to Article 97(3) of the Federal Constitution.

The said section should be amended by excluding the Muslim depositors.

4) The existence of Jabatan Wakaf, Haji dan Zakat (JAWHAR) in 2004, a

central agency is to assist Baitulmal division of Islamic Religious Council

(MAIN). Besides, in JAWHAR, there is a division known as Mal

department. Looking at the general functions of JAWHAR, it maybe

overlapping with the role played by Baitulmal.

1.2 RESEARCH OBJECTIVES

In order to conduct a study on Baitulmal of Federal Territories from legal point of

view in terms of its function as a whole, the writer has specific research objectives as

follows:

1) To explain the real concept of Baitulmal through the historical

development of Baitulmal as practised in the period of Prophet (s.a.w.),

Khulafā al-Rāshidūn, Banī Umayyah and Banī Abbāsiyyah.

2) To elucidate historical developments of the practise of Baitulmal in

Malaysia from the pre-colonial period until the modern practise of

Baitulmal to-date.

6

3) To examine and identify the rules and regulations practised by the

Baitulmal of Federal Territories.

4) To analyse the legal constraints faced by the Baitulmal of Federal

Territories and to recommend suggestions to solve the said problem.

1.3 HYPOTHESIS

Based on the above background and observation, the hypothesis laid down on this

research is as follows:

1) The existing legal provisions are inadequate to cater the problem faced by

the Baitulmal of Federal Territories especially on the limited jurisdiction

of Baitulmal of Federal Territories against the distribution of property

towards aṣnāf.

2) The real concept of Baitulmal as a national treasury practised during the

period of Prophet (s.a.w.), Khulafā al-Rāshidūn, Banī Umayyah and Banī

„Abbāsiyyah is the best model for the current Baitulmal institution to

follow and practise in its administration and management.

1.4 SCOPE OF RESEARCH

The scope of this research refers to the administration of Baitulmal of Federal

Territories and the challenges of Baitulmal of Federal Territories. This research

exclusively covers the historical development of Baitulmal in Islamic history in order

to obtain a clear view on the real concept of Baitulmal during the period of Prophet

until the period of Banī „Abbāsiyyah. The research also focuses on the historical

development of Baitulmal in Malaysia in order to know whether the real concept of

Baitulmal practised during those days is applied in Malaysia. The writer then

7

emphasises on the administration of Baitulmal of Federal Territories by explaining the

organisational structure of the Islamic Religious Council of Federal Territories

(MAIWP) and also the challenges of Baitulmal of Federal Territories in implementing

the real concept of Baitulmal from legal point of view.

1.5 LITERATURE REVIEW

The research on the institution of Baitulmal has been discussed by many scholars and

researchers in many aspects from the early period of Islam till to date. Several studies

have been done on the aspects of administration and management of Baitulmal.

However, there are no sufficient studies, which discuss on the legal constraints of

Baitulmal of Federal Territories. The legal constraints faced by the said Baitulmal is

not a new problem faced by the Baitulmal of Federal Territories since the enforcement

of Baitulmal was implemented through the rules provided under the Administration of

Islamic Law of Federal Territories Act which was enacted in 1993. Thus, this research

will look into the challenges faced by the Baitulmal of Federal Territories from legal

point of view and the current practise of the administration of Baitulmal of Federal

Territories.

As mentioned earlier, the institution of Baitulmal has long existed and

functioned within the Islamic society. Hence, research on Baitulmal was also

conducted by many scholars and researchers. This included the original reference

relating to the institution of Baitulmal for example by Abū „Ubaid al-Qāsim bin Salām

in his book namely al-Amwāl. Other books that can be referred for the purpose of this

8

study are books of al-Kharāj written by Yahya ibn Adam,10

al-Muqaddimah written

by Ibn Khaldūn,11

and al-Aḥkām al-Sulṭāniyah written by al-Mawardi.12

Noorhafiza Ahmad wrote her research on the institution of Baitulmal of

Federal Territories. In her research, she discusses about the practise and procedure of

Baitulmal Federal Territories. While such writing brought by Noorhafiza forms a good

starting review for the present research on the administration of Baitulmal of Federal

Territories.13

One of the modern scholars on Baitulmal issue is Hailani Muji Tahir who

opined that Baitulmal is an institution that plays a role to conduct the policy of

country‟s budget which is known as national treasury.14

He further explained that the

real concept of Baitulmal is an important organisation that has its own structure and

financial system. The Baitulmal was administered directly under the central

government.15

As referring to current practise in Malaysia nowadays, the real concept

of Baitulmal could be referred as the Ministry of Treasury which is managed directly

under the central government in Putrajaya.

According to Juraish,16

the real problem of Baitulmal nowadays is that its

function has been limited into small scope. Its real function as a national treasury has

been limited into State matters only. This can be seen from the State List of Federal

Constitution which explains the sources of Baitulmal are under the state treasury and

not as federal treasury. Furthermore, the list of Baitulmal sources that differentiate

10

Yahya bin Adam al-Qurasyī, al-Kharāj, translated by A. Ben Shemesh (Leiden: n.p, 1935). 11

Ibn Khaldūn, al-Muqaddimah (Kuala Lumpur: Dewan Bahasa dan Pustaka, n.d.) 12

Abū al-Hassan Ali bin Muhammad bin Habib al-Mawardi, al-Aḥkām al-Sulṭāniyah.v. 2 (Cairo:

Matba‟ah Mustafa al-Halabi, 1962). 13

Noorhafiza binti Ahmad, “Baitulmal Institution: A Study on Procedure and Practise in Federal

Territories of Kuala Lumpur”, (Degree Thesis, Kolej Universiti Islam Malaysia, 2004). 14

Hailani Muji Tahir, Sistem Ekonomi Islam dan Dasar Belanjawan, (Kuala Lumpur: Badan Dakwah

dan Kebajikan Islam Malaysia, 1991), at 80. 15

Ibid. 16

Juraish Kamaruddin, “Memperkasa Baitulmal Menerusi Undang-undang Syariah”, Jurnal

Pengurusan JAWHAR, vol. 2, no.2 (2008): 106-107.

9

between State revenues or Federal revenues is not mentioned clearly in any provisions

of State Enactment and Federal Constitution. The said list includes Islamic banking,

Islamic trust and others. He further explained that there is a need to corporate the

Baitulmal so that the Baitulmal has its own legal entitehy and its locus standi. By

having its own locus standi, the Baitulmal could operate efficiently, independently

and systematically when it involves the litigation action in collecting and distributing

its sources. The Baitulmal could file its action in the court in its own name without

involving the Islamic Religious Council as the party in the litigation.17

The article is

found very useful to this study since it relates to the legal point of view of Baitulmal.

However, this article mentioned the legal constraint of Baitulmal in becoming a

national treasury. It does not focus on the legal constraint of Baitulmal in each State.

However, according to Latiffie,18

the problem of the administration of

Baitulmal property is due to lack of management skills in the administration.

According to his survey made in Johor, he opined that the duties of the chairman of

the Baitulmal is overloaded and lead to improper output. He also instilled that the rule

is inadequate to cater the development of Baitulmal. He said that there is no provision

that mentioned on the power of Islamic Religious Council to collect property,

minerals and one tenth of the convertors property. The writer found that this article is

helpful in determining the problems faced by the Baitulmal particularly in Baitulmal

of Federal Territories.

17

Juraish Kamaruddin, “Pemerkasaan Entiti dan Sumber Perbendaharaan Baitulmal Melalui Dinamika

Muamalat dan Undang-Undang Syariah”, in Baitulmal: Masihkah Relevan? Prosiding Konvensyen

Baitulmal Kebangsaan 2009, edited by Sohaimi Mohd Salleh, Rokhoun Nafsiah Abd. Rashid and

Hasan Hafizi Hanapi (Kuala Lumpur: Jabatan Wakaf, Zakat dan Haji (JAWHAR), 2009), at 177. 18

Latiffie Awang (1987), “Bayt al-Mal Negeri Johor: Masalah-masalah dan Cara-cara Mengatasinya”,

(Kertas Kerja Seminar Pembangunan Wakaf dan Bayt al-Mal Negeri Johor, organized by State

Government of Johor and Institut Tadbiran Awam Negara 1408/1987)