`Zakat' becomes tax deductible from 2002<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
A tax that all Muslims are obliged to pay, zakat, will become
\nfully deductible from income taxes as of 2002, Minister of
\nReligious Affairs Said Agil Husein Al Munawar said on Tuesday.<\/p>\n
The directorate general of tax has began disseminating
\ninformation about the ruling to the regions, Said told reporters
\nafter meeting with Vice President Hamzah Haz.<\/p>\n
Muslims are obliged to pay 2.5 percent of their wealth,
\nmeasured in terms of both their income streams and wealth, in
\nzakat. This is in on top of other donations they are encouraged
\nto give to the needy.<\/p>\n
Said said people who submit receipts of zakat payment with
\ntheir tax returns would be entitled to a 2.5 percent discount
\nfrom their regular income tax, which currently range between 5
\nand 35 percent.<\/p>\n
Most Muslims who pay income taxes to the government currently
\npay the 2.5 percent zakat on top.<\/p>\n
Various private groups administer the zakat, from local
\nmosques to larger national organizations, collecting the money
\nand distributing it to the needy.<\/p>\n
Said said his office was in the process of setting up a new
\ndirectorate which would handle zakat as well as Muslim charity
\ncontributions (wakaf).<\/p>\n
Five banks have been enlisted to facilitate the payments of
\nzakat, including Bank Syariah Mandiri, BNI Syariah and dan Bank
\nMuamalat.<\/p>\n
He said people seeking more information about the new
\nregulations should contact the Ministry of Religious Affairs.<\/p>\n
The government has also set up the National Zakat Executive
\nAgency with 22 regional offices, and smaller branches at district
\nlevel. The agency would be inaugurated by President Megawati
\nSoekarnoputri on Dec. 3, according to Antara.<\/p>\n
It is not immediately clear how the zakat policy will impact
\non the government's tax revenues. Because of the self assessment
\nsystem, the majority of Indonesians do not even pay their income
\ntaxes. The government has been struggling to bolster the number
\nof people who pay income taxes.<\/p>\n
Muslim leaders on Wednesday praised the government's new zakat
\npolicy as a positive move expected to further encourage Muslims
\nto pay their religious taxes.<\/p>\n
\"It will give a good future for zakat payers,\" said Muslim
\nscholar Ali Yafie who was a former Nahdlatul Ulama (NU) Islamic
\norganization law-making body chairman.<\/p>\n
He said the tax deduction was a \"good and fair step\" for
\nMuslims, as they will not necessarily pay double on their taxes.<\/p>\n
Yafie said the policy was a follow-up implementation of the
\ncountry's law on zakat and non-obligatory donations (infaq).<\/p>\n
Asked whether the move would increase zakat payments, while
\nthere are no sanctions imposed on violators, he said: \"It depends
\non the socialization of the policy.<\/p>\n
\"Any religious regulation should not necessarily require
\nsanctions.\"<\/p>",
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