ANALYZING THE INTEGRATION OF ZAKAT AND TAX TO ENHANCE COMPLIANCE AMONG MUSLIM TAXPAYERS

Abstract

Tax and zakat are financial obligations for the Indonesian people. This condition creates a double financial burden. To address this issue, Law No. 7 of 2021 on the Harmonization of Tax Regulations (UU HPP) contains one of the policies regarding zakat which can be used as a deduction in calculating taxable income. This study aims to analyze the effectiveness of this policy through the perspective of Muslim taxpayers and Islamic economics. A qualitative approach was used, combining data from questionnaires, interviews, and a review of relevant literature. The research analyzed the regulatory framework and public perception. Findings reveal that this policy has not been optimally utilized. This happen due to the lack of knowledge and information about this policy. Limited tax literacy, insufficient outreach from relevant institutions, and a lack of procedural understanding are key factors contributing to this issue. This study offers novelty by not only explore fiscal policy from a conceptual perspective, but also specifically examines its implementation and links it to the perceptions of Indonesian Muslim taxpayers. It also highlights the integration of zakat fiqh and fiscal policy which are included in one comprehensive study. This study also provides practical recommendations to strengthen the synergy between zakat management institutions and the Directorate General of Taxes (DGT) through digitalization of both integrated reporting systems and providing education to the taxpayers. The results are expected to enhance economic justice distribution while improving tax compliance in Indonesia.