Following Malaysia's Example, FOZ Pushes for Zakat to Become Direct Tax Credit

The Zakat Forum (FOZ) has expressed full support for the proposal to make zakat a direct tax credit, rather than merely a deduction from taxable income. According to FOZ, this policy would represent a significant transformation in the Islamic philanthropy ecosystem while strengthening efforts to improve public welfare. FOZ Chairman Wildhan Dewayana stated that the idea, previously put forward by the National Sharia Board of the Indonesian Ulema Council (DSN-MUI), is an aspiration long championed by zakat activists in Indonesia. “As the head of an association that oversees hundreds of zakat management institutions at both national and regional levels, I fully support and am ready to oversee the realisation of this strategic policy,” Wildhan said on Thursday (23/7/2026). According to Wildhan, the current system does not yet provide optimal fiscal justice for Muslims. He emphasised that zakat paid through official institutions only reduces gross income, meaning its impact on the amount of tax payable remains relatively small. He explained that under a tax credit scheme, every rupiah of zakat paid to an official institution would directly reduce the nominal tax obligation of the taxpayer. This policy is considered not merely an economic incentive, but a form of state recognition of zakat’s contribution to helping carry out social welfare functions. He also assessed that the discussion on revising Law Number 23 of 2011 concerning Zakat Management is the right momentum to include a clause making zakat a direct tax credit.