1% makes a difference

My relationship with the Zakat House was and will continue to be one of work, friendship, and love, as this institution is the one that has efficiently implemented all the projects of one-third of the late father—may Allah have mercy on him—for 15 years. This coincides with my assignment as a member of the Board of Directors and Vice-Chairman of the Board in this institution, and from the first day I set my sights on the goal of giving back to that institution by harnessing all energies to develop work mechanisms. With the grace and help of Allah, I formed the Governance and Risk Management Committee emanating from the Board of Directors and started a promising project that will have a great impact on developing work mechanisms and consolidating the principles of transparency, governance, and risk control. I will address the issue of governance in another article, but now we will talk about a very important matter that may be absent for many, namely the "1%". This number has a story, as it is the percentage of what the Ministry of Finance collects under a law that obliges Kuwaiti public and closed shareholding companies to pay zakat tax from their annual net profits to the Ministry of Finance, according to Law No. 46 of 2006 regarding zakat and the contribution of public and closed shareholding companies to the state budget. In fact, it cannot be called a "zakat law", as it is in fact a tax that can be deducted from the zakat accounts of companies if those companies decide to transfer it to the Zakat House. Or it is more like a tax if it decides to transfer it to the state budget, and the matter is optional. For your information, this law was passed with the effort and support of my dear brother, Ahmed Baqer, during his membership in the National Assembly. However, what happens is that many companies are not fully aware of the mechanism for transferring amounts, and no one is surprised if I say that some companies had the impression that the money went to the Zakat House as soon as it was transferred to the Ministry of Finance, while in fact it was directed to public services. After a little verification, it turns out that there is a page in the tax return that is prepared by the external auditor for companies that is appended to two options and listed them below as they are in the declaration for their importance:

1- The value of the amount to be paid for zakat: (...)

2- The value of the sum to be paid for public services: (...).

If the external auditor fails to fill out any of them, as I understand it, the money goes to public services and not to the Zakat House. The important thing is that this matter may require an amendment to those declarations to be clearer and more transparent to the decision-maker, but such a procedure, as it is said, takes a long time. But the fastest and best solution is to carry out a marketing and guidance campaign for the institutions, so we established teams of members of the Board of Directors and with the senior management at home, which was adopted by the dear brother, Abdul Mohsen Al-Kandari, the Assistant Undersecretary, and Bo Barak is considered a beacon of activity and one of the distinguished leaders, and when I meet him, I say to him, You are the dynamo of the house. That campaign, as it is said, bore fruit and had a great impact, not only in clarifying the mechanism for preparing the tax return but also in highlighting the role of the Zakat House and what it can offer to those institutions and the community in terms of implementing charitable projects inside Kuwait for their benefit, whether from zakat funds or out of a contribution to social responsibility, which many companies are keen on. The Zakat House plays a major role inside Kuwait, and if my memory fails me, its local contribution amounted to approximately 20 million dinars as social assistance for individuals, mutual funds, in-kind donations, and chaste families, and 8 and a half million are externally represented by the sponsor of an orphan and external projects (according to the desire of the donor). Personally, I call on all institutions to ensure that 1% is directed to the Zakat House because their mission is clear, assured, and purposeful. This issue does not detract from what the Ministry of Finance is doing in directing the funds allocated to it to projects pertaining to the state. However, Zakat House needs such money more than the Ministry of Finance. How I wish the law would be amended and the amounts limited only to supporting the activities of the Zakat House, and from the heart I say: supporting the Zakat House is a national duty, and it should be noted that 1% makes a difference.

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