Re-formulation zakat system as tax reduction in Indonesia

Abstract

Zakat is one of the Islamic financial instruments which is obligatory for every Muslim whose earnings reach the prescribed amount (nishab). On the other hand taxes must still be paid as an obligation of every citizen. Under the law, it is stated that zakat can be a deduction from taxable income. The aim of this research is to offer a more advanced concept, namely zakat can be a deduction from income tax. The technique used in this research is content analysis on the literatures discussing about zakat and tax in Islam. The results of this study suggest that zakat as a deduction from income tax has a greater impact than zakat as merely a deduction from taxable income. Zakat as a deduction from income tax will increase the impact of zakat in a larger economy. Zakat merupakan salah satu instrument keuangan Islam yang wajib ditunaikan oleh setiap umat muslim yang pendapatannya telah memenuhi jumlah yang ditentukan (nisab). Sedangkan, di sisi lain pajak harus tetap dibayarkan sebagai suatu kewajiban dari setiap warga Negara. Berdasarkan undang-undang, disebutkan bahwa zakat dapat menjadi pengurang penghasilan kena pajak. Tujuan penelitian ini ialah untuk menawarkan suatu suatu konsep yang lebih maju yaitu zakat dapat sebagai pengurang pajak penghasilan. Teknik analisis yang digunakan ialah analisis isi terhadap literatur-literatur terkait zakat dan pajak dalam Islam. Hasil penelitian menunjukkan bahwa zakat sebagai pengurang pajak penghasilan memiliki dampak lebih besar daripada jika zakat hanya sebagai pengurang penghasilan kena pajak. Zakat sebagai pengurang pajak penghasilan akan meningkatkan dampak zakat di dalam perekonomian yang lebih besar

Prospects of Zakat as Tax Credit in a New Normal COVID-19 Period

“…In a previous research result, it shows that zakat as a deduction from income tax has a greater effect than zakat if is treated as only a deduction for taxable income. Zakat as a deduction from income tax will increase the impact of zakat on the larger economy (Djatmiko, 2019). Based on the study, the results of the previous studies above show that there is a positive effect, from the integration of zakat and tax policies, on income in both sectors.…”

The Prospects of Policies Integration on Zakat and Tax in Indonesia to Overcome the Economics Problem due to the COVID-19 Pandemic

“…In a previous research result, it shows that zakat as a deduction from income tax has a greater effect than if zakat is only a deduction for taxable income. Zakat as a deduction from income tax will increase the impact of zakat on the larger economy (Djatmiko, 2019). Based on the study, the results of the previous studies above show that there is a positive effect, from the integration of zakat and tax policies, on income in both sectors.…”

Islamic Economics Development in Indonesia: Reflection on Contemporary Thoughts of Muslim Intellectuals

“…Therefore, if the government to promote an Islamic economy by improving the management of zakah, then zakah shall be placed as a deduction from income tax. If zakah is placed as a deduction from income tax, there will be a greater impact on the larger economy, compared to when zakah is only positioned as a deduction from earnings tax (Djatmiko, 2019). There are several policy recommendations proposed in the paper (Djatmiko, 2019).…”

“…If zakah is placed as a deduction from income tax, there will be a greater impact on the larger economy, compared to when zakah is only positioned as a deduction from earnings tax (Djatmiko, 2019). There are several policy recommendations proposed in the paper (Djatmiko, 2019). First, the government shall encourage citizens to have a tax number to process zakah claims as a tax deduction.…”