`Zakat' becomes tax deductible beginning next year: Minister
`Zakat' becomes tax deductible beginning next year: Minister
The Jakarta Post, Jakarta
A tax that all Muslims are obliged to pay, zakat, will become
fully deductible from income taxes as of 2002, Minister of
Religious Affairs Said Agil Husein Al Munawar said on Tuesday.
Muslims are obliged to pay 2.5 percent of their wealth,
measured in terms of both their income streams and wealth, in
zakat. This is in on top of other donations they are encouraged
to give to the needy.
Said said people who submit receipts of zakat payment with
their tax returns would be entitled to a 2.5 percent discount
from their regular income tax, which currently range between 5
and 35 percent.
Most Muslims who pay income taxes to the government currently
pay the 2.5 percent zakat on top.
Various private groups administer the zakat, from local
mosques to larger national organizations, collecting the money
and distributing it to the needy.
Said claimed his office was setting up a new directorate to
handle zakat and Muslim charity contributions (wakaf).
Five banks have been enlisted to facilitate the zakat
payments, including Bank Syariah Mandiri, BNI Syariah and Bank
Muamalat.
Those seeking more information should contact the Ministry of
Religious Affairs.
The government has also set up the National Zakat Executive
Agency with 22 regional offices, and smaller branches at district
level which, according to Antara would be inaugurated Dec. 3.
It is not immediately clear how the zakat policy will impact
on the government's tax revenues, as a majority of Indonesians
still avoid paying income tax.
Muslim scholar Ali Yafie on praised the new zakat policy as
Muslims would not necessarily pay double on their taxes.
Ali, former chairman of Nahdlatul Ulama's law-making body,
noted that the policy was a follow-up to the law on zakat and
non-obligatory donations (infaq).
Asked if it could increase zakat payments, while no sanctions
are imposed, he replied: "It depends on the socialization of the
policy... Any religious regulation should not necessarily require
sanctions."