PROFESSIONAL ZAKAH AND TAXATION IN INDONESIA: EFFECTIVENESS, DISTRIBUTIVE JUSTICE, AND A SHARIA-BASED COMPARISON WITH MALAYSIA AND SAUDI ARABIA

Abstract

In recent years, several countries have begun introducing professional zakah as an effort to distribute wealth more equitably. The establishment of professional zakah regulations and policies has created new perceptions and had a significant impact on the society. Some countries have similarities in managing zakah and taxes, while others use different models. In fact, this innovation is conflicting the fatwas issued by several prominent Islamic scholars and its implementation is considered erroneous. This study aims to examine the conformity of professional zakah with Sharia, its effectiveness and contribution compared to modern taxation, and the implementation of professional zakah policy in Indonesia. Considering the ambiguity of this issue, the author analyzed the comparative systems of professional zakah and taxation in Malaysia and Saudi Arabia. The literature review concluded that the principles and management of professional zakah and taxes in Indonesia, Malaysia, and Saudi Arabia are similar, with several differences. Practically, professional zakah is used as a deduction from taxable gross income, or as a reduction of tax payable. However, the collection of zakah can be carried out simultaneously with taxes collected by the government or carried out in a decentralized manner (officially and unofficially). Therefore, the differences have a significant impact on increasing zakat and tax collection simultaneously.