Tax Credit for Zakat Could Boost Contributions, Requires Serious Study

JAKARTA – Zakat as a direct tax deduction (tax credit or tax rebate) is believed capable of boosting enthusiasm for paying zakat. Nevertheless, the proposal put forward by zakat activists in Indonesia needs to be studied comprehensively.

The issue emerged at a Focus Group Discussion (FGD) on Philanthropy Journalism themed “Full Tax Deduction (Tax Credit): Opportunities and Challenges”, organised through a collaboration between the Halaqah Tadarus Al-Qur’an Foundation, Baznas RI, Commission VIII of the House of Representatives (DPR RI), and Lazismu at the PP Muhammadiyah building in Jakarta on Saturday (18/7/2026).

Singgih Januratmoko, Deputy Chairman of DPR Commission VIII, welcomed the discussion on integrating zakat into the national taxation system.

According to him, Indonesia has enormous zakat potential, given that around 85 per cent of Indonesia’s more than 280 million population are Muslim.

He said zakat is not only a religious obligation, but also an instrument of wealth redistribution capable of reducing social inequality, strengthening solidarity, and empowering communities.

“Zakat is an instrument of wealth redistribution. Those who are able can channel their zakat to people in need, thereby improving welfare,” he said.

Singgih explained that current Indonesian regulations have in fact already accommodated zakat as a deduction from taxable income.

However, the idea of making zakat a tax credit is worth discussing because it has the potential to increase public enthusiasm for paying zakat while strengthening the national sharia economic ecosystem.

Nevertheless, he cautioned that implementing such a policy requires comprehensive study, both in terms of regulation, fiscal impact, administrative systems, and governance.