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First of all, a loud and clear disclaimer, I am NO Shariah Scholar, I am an applied researcher in Islamic finance. My views here are personal and do not represent the official views of any institutions, including INCEIF. Any healthy comments are most welcome. This is purely a write-up for the betterment of society, no malafide whatsoever neither to blame or fault anyone.
It is viral news now about how dividends from EPF Statutory Savings, 69% of the returns needs to be ‘cleansed’ via zakat or Baitulmal as these returns are from non-Shariah compliant investments. It all started when one of the Shariah Scholars came out with this advice, and now it has been shared, discussed out of context and creating some uncertainties.
Let us discuss it from a rational rather than an emotional angle; do Muslim EPF contributors have an alternative?
Yes, they do – Shariah Savings.
Are there any difficulties for them to migrate to Shariah Savings? No, there isn’t any. In fact, you could simply do it online without even visiting the EPF office.
Is there any public announcement and literacy programme conducted or announced by EPF on this matter? Yes, the awareness campaign has been conducted continuously by EPF in the last 3 years.
I am worried, perturbed and disturbed by the way it is currently being discussed and understood. First of all, if we have inadvertently erred in our judgements and practices, or if we do not have any options or alternatives, it is ok and forgivable as Allah SWT is the Most Forgiving and Merciful. However, I do not think that this is the case here because there is available Shariah alternative coupled with campaigns and literacy programmes that had been conducted to inform and educate the depositors.
What I am more concerned with is, people might use this as a ‘fatwa’ or interpret it as a permission to launder money the Shariah way- what’s stopping the depositors from laundering and cleansing the returns from their conventional EPF savings based on this explanation?
Worse, what if the man on the street use this ‘fatwa’ or ‘understanding’ to equate it with other investments? For example, using only 10 per cent of the dividend from his investment in Genting Bhd, and rationalising it based on Genting’s 10% ‘halal’ business activities.
I am actually having sleepless nights thinking about this. Wallahualam.
By Assoc. Prof. Dr. Baharom Abdul Hamid