Zakat Proposed as Full Tax Credit, Says DSN MUI

The National Sharia Board of the Indonesian Ulema Council (DSN MUI) has proposed that zakat payments be recognised as a full tax credit, rather than merely serving as a deduction from taxable income as currently practised. The proposal was voiced during the National Silaturahmi and Baznas Award 2026 event in Jakarta on Tuesday. “Our current regulation only allows zakat to reduce taxable income, so it is a tax deduction, not a tax credit. We are striving for zakat to become a tax credit, so that what is paid as zakat simultaneously becomes part of our tax obligation,” said DSN MUI Chairman Cholil Nafis. According to Cholil, this policy change would provide a fairer incentive for Muslims who bear the dual burden of fulfilling religious alms and state taxes. He argued that recognising zakat as a direct credit against tax liabilities would encourage more individuals and businesses to channel their zakat through official institutions, thereby strengthening the national sharia economy. Cholil further explained that the move would not diminish state revenue but rather stimulate economic circulation. “When we talk about economic growth through zakat, it does not mean the wealth disappears. The more zakat flows, the greater the purchasing power of the community, which in turn drives the economy,” he said. He stressed that regardless of the tax treatment, the obligation to pay zakat remains a religious duty for Muslims. The DSN MUI hopes the government will consider the proposal to provide greater legal certainty for zakat payers and to enhance the role of zakat in supporting equitable public welfare.