Indonesian Islamic group backs zakat as direct tax credit

Indonesia's Persatuan Islam (PERSIS) has welcomed a renewed proposal to recognize zakat, or Islamic charitable donations, as a direct tax credit. The organization views this as a strategic move to bolster national development by aligning fiscal policy with Islamic philanthropy.

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We hope the discourse on zakat as a tax credit is comprehensively studied so that it results in a policy that provides legal certainty, strengthens justice, increases zakat compliance, and increases the contribution of Muslims in national development.

Currently, zakat in Indonesia can only be deducted from taxable income, not directly from tax owed. PERSIS argues that treating zakat as a tax credit would create a more equitable system for Muslims and significantly enhance the national zakat ecosystem. This shift, they believe, would foster greater public benefit through the distribution of wealth.

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Zakat has proven to be an effective instrument in reducing poverty, strengthening social solidarity, and building community independence. Therefore, any policy that encourages the optimization of zakat deserves support as part of the effort to build a more just Indonesia.

Dr. H. Haris Muslim, a Dewan Syariah official at LAZ PERSIS and its Secretary General, stated that recognizing zakat as a tax credit demonstrates state support for Islamic principles of justice. He expressed hope that a comprehensive review of this proposal would lead to clear legal certainty, promote fairness, increase zakat compliance, and expand the contribution of Indonesian Muslims to national development.

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The proposal for a zakat policy as a tax credit has long been discussed in various forums. This is an important momentum to strengthen the synergy between the state and zakat institutions.

Angga Nugraha, CEO of LAZ PERSIS, added that the idea of zakat as a tax credit has been discussed for years. He sees the current momentum as a crucial opportunity to strengthen the synergy between the state and zakat institutions. Nugraha believes that a tax credit policy would serve as a positive incentive for individuals to fulfill their zakat obligations through trusted and professional organizations, thereby maximizing zakat's effectiveness in poverty reduction and social solidarity.

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LAZ PERSIS welcomes any effort that can strengthen the national zakat ecosystem. A zakat policy as a tax credit will be a positive incentive for the public to pay zakat through trustworthy and professional institutions.