`Zakat' becomes tax deductible from 2002
`Zakat' becomes tax deductible from 2002
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.
The directorate general of tax has began disseminating
information about the ruling to the regions, Said told reporters
after meeting with Vice President Hamzah Haz.
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 said his office was in the process of setting up a new
directorate which would handle zakat as well as Muslim charity
contributions (wakaf).
Five banks have been enlisted to facilitate the payments of
zakat, including Bank Syariah Mandiri, BNI Syariah and dan Bank
Muamalat.
He said people seeking more information about the new
regulations 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. The agency would be inaugurated by President Megawati
Soekarnoputri on Dec. 3, according to Antara.
It is not immediately clear how the zakat policy will impact
on the government's tax revenues. Because of the self assessment
system, the majority of Indonesians do not even pay their income
taxes. The government has been struggling to bolster the number
of people who pay income taxes.
Muslim leaders on Wednesday praised the government's new zakat
policy as a positive move expected to further encourage Muslims
to pay their religious taxes.
"It will give a good future for zakat payers," said Muslim
scholar Ali Yafie who was a former Nahdlatul Ulama (NU) Islamic
organization law-making body chairman.
He said the tax deduction was a "good and fair step" for
Muslims, as they will not necessarily pay double on their taxes.
Yafie said the policy was a follow-up implementation of the
country's law on zakat and non-obligatory donations (infaq).
Asked whether the move would increase zakat payments, while
there are no sanctions imposed on violators, he said: "It depends
on the socialization of the policy.
"Any religious regulation should not necessarily require
sanctions."