Vice President Ma'ruf: Zakat and taxes are effective tools to reduce inequality

The development of sharia economics that contributes greatly to realizing economic justice, one of which is zakat

Jakarta (Armfalcon.com) – Deputy President Ma’ruf Amin said that zakat in the sharia economy and taxes are both effective tools to reduce inequality.

“The development of the sharia economy that contributes greatly to realizing economic justice, one of which is zakat. The sharia economy and taxes actually have the same breath. Both are encouraged, among other things, to reduce inequality,” Vice President Ma’ruf Amin said in Jakarta, Wednesday.

Vice President Ma’ruf conveyed this at the inauguration of the opening of the “14th Asia Pacific Tax Forum” with the theme “Building the Indonesian Sharia Economy in the Middle of Global Economic Dynamics”.

Also read: The Vice President supports increasing community welfare through zakat

“Within the framework of economic justice that we should realize, the two instruments are expected to contribute more optimally, so that they become effective tools for increasing people’s welfare while reducing inequality,” said the Vice President.

According to the Vice President, as an instrument of sharia social funds, zakat is one of the fields that is worked on carefully in Indonesia.

“Zakat as part of the pillars of Islam has a function, one of which is as a means of redistributing wealth. Zakat paid by muzaki will increase the welfare of mustahik and ummah,” said the Vice President.

In the context of fiscal policy, zakat is one of the instruments whose initial function resembles the current fiscal instruments. The history of Islamic public financial management shows that zakat is a fiscal policy instrument that functions as a source of income as well as a source of state expenditure.

“On the income side, zakat is the portion collected by the amil from the zakatable assets paid by the muzaki. On the expenditure side, the zakat that is recorded is the amount of zakat distribution to eight asnaf groups, zakat recipients,” explained the Vice President.

For Indonesia, said the Vice President, although not part of the state budget, zakat can very well be one of the supporting instruments for fiscal policy.

“That is through its role in assisting the government in certain posts that are in accordance with the allotment of zakat such as poverty alleviation, stunting and social protection,” said the Vice President.

The Vice President said that during 2022, BAZNAS and all zakat managers had carried out poverty alleviation for approximately 463 thousand poor mustahik, of which around 194 thousand were extreme poor. This figure contributes 1.76 percent to national poverty alleviation as of September 2022.

“Zakat is even said to be able to become an ‘automatic fiscal stabilizer’. Zakat funds will be spent on the poor, so that the consumption of this group can continue without being too affected by economic conditions, thus making the situation more stable,” said the Vice President.

Whereas in relation to taxes, the function of zakat can be said to intersect with the tax function, namely redistributing wealth. Practice in a number of countries shows that zakat can reduce income tax, for example in Malaysia.

“Seeing the huge potential for zakat collection in Indonesia, I consider it important to have a policy review and concrete recommendations related to the ideal relationship between zakat and taxes in the future,” said the Vice President.

Also read: Vice President: All components of the zakat ecosystem need orchestration

source: www.antaranews.com

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