Tax deduction should be extended to other religions, legislator says

Kurniawan Hari S. and Bambang Nurbianto, The Jakarta Post, Jakarta

Legislator Astrid S. Susanto of the Christian-based Love the Nation Democratic Party (PDKB) welcomes the government's plan to make Muslims' obligation of giving zakat tax deductible, but urges the government to apply the same facility to non-Muslims.

"I fully welcome the decision but it should also be applied to other religions," she told The Jakarta Post on Thursday night.

Muslims are obliged to pay zakat (an obligatory payment of alms to the poor) and Christians, both the Catholics and Protestants, have a religious obligation to pay one-tenth of their income to the church.

"It is common practice for Catholics and other Christians to pay a tithe to church establishments," she said.

Minister of Religious Affairs Said Agil Husein Al Munawar said on Wednesday that wealth tax (zakat maal) Muslims were obliged to pay every year, accounting for 2.5 percent of their total yearly net income, would become fully tax deductible starting in 2002.

The Indonesian Ulemas Council (MUI) also welcomed the government's plan to incorporate zakat paid by Muslims into the income tax starting next year, stressing that the policy would encourage Muslims to pay zakat.

"The incorporation of zakat into income tax has long been proposed by many Muslim communities. I believe the policy will encourage Muslims to pay zakat," said Amidhan, who chairs MUI's department for economic affairs, on Thursday.

Amidhan, however, stressed that the National Zakat Executive Agency to be officiated by President Megawati Soekarnoputri on Dec. 3 should be authorized to issue tax receipts for those who have paid zakat.

He said a similar policy had been implemented in many developed countries. In the U.S., for example, companies that donate money to charity foundations would receive tax cuts, Amidhan said.

"Or at least the government does not impose tax on the amount donated to charity," Amidhan told the Post on Thursday.

A legislator from the Golkar faction, Ruben Gobay, however, said the government's plan to make zakat tax deductible was a setback in terms of morality.

"Zakat or alms should really be an act of charity without compensation. So if the zakat payers get a cut in their regular income taxes, it would be regretful," Ruben told the Post.

He suggested that giving assistance to other people should not be made formal as it was a personal matter.

He said human beings were meant to help each other, therefore there was no need to formalize it.

Fellow legislator from the Reform faction Samuel Koto expressed a similar view that the inclusion of zakat as part of income tax would reduce the value of charity. "I think its sense of altruism will be reduced," he said.

However, Samuel did not place too much importance on the issue, saying that it was only a matter of calculation. "For the Muslims who have paid zakat it could also be considered as tax and for the Protestant or Hindus who don't pay zakat their taxes are 100 percent," he added.

According to Samuel, should zakat be included in income tax, the same mechanism must be applied as that of other taxes, which means "there must be accountability on the part of the taxation authorities."