Sunday, February 5, 2023

Those withdrawing from EPF without a good reason must pay 2.5% in Zakat

NewsThose withdrawing from EPF without a good reason must pay 2.5% in...

The government has recently announced that EPF contributors are allowed to withdraw RM10,000 from their EPF savings.

During the announcement, Prime Minister Datuk Seri Ismail Sabri Yaakob has appealed to contributors to only withdraw their savings unless they absolutely needed the cash.

Following the announcement, it was reported that a payment of zakat to the EPF of 2.5% is mandatory on individuals who make EPF withdrawals amounting to RM10,000 as allowed by the government starting 1 April.

Source: Malay Mail

According to the Federal Territory Islamic Religious Council Zakat Collection Center (PPZ-MAIWP) Senior Shariah & International Unit Manager Ahmad Husni Abd Rahman, he said this mandatory payment of zakat is applicable for those who make withdrawals willingly without any financial burden and problems.

He was quoted saying by Berita AlHijrah as saying that those who are not facing any financial burdens, debt or loss of income, is obliged to pay zakat from the EPF withdrawals that have been made.

“The payment of zakat is not mandatory for individuals who make the withdrawal of money due to the urgent need for income sources.” he said.

If one is making the withdrawal due to the financial pressure they are facing, then the withdrawal is not subject to zakat.

Among the exemptions are:

  • Individuals who suffered a loss of income and is in need of money to continue living.
  • Those who still have debts that need to be settled immediately.
  • Withdrawals used for basic or important needs such as medicine, education, and other valid reasons.

It is reported that the imposition of zakat will deter the public from spending the money on unnecessary items.

Since the Covid-19 pandemic started in Malaysia, the Malaysian government had allowed EPF contributors to withdraw their pension savings through the i-Lestari, i-Sinar and i-Citra schemes to support their living.

Despite the several rounds of stimulus plans, the country’s economy is still struggling and the most impacted are the low-income earners.

What do you think about this policy that mandates a 2.5% zakat payment? Share your thoughts!

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