'Zakat' ruling to boost tithing

'Zakat' ruling to boost tithing

Ahmad Junaidi, The Jakarta Post, Jakarta

The controversial new rule giving tax incentives for Muslims who
give zakat (Muslim tithes) will boost the amount of donated from
Muslims next year, and would also increase Muslims' participation
in alleviating poverty, officials said.

While attending a fund-raiser here, the director of zakat
affairs at the Ministry of Religious Affairs, M. Tulus, and
Jakarta Governor Sutiyoso both expressed confidence that the new
rule would entice individuals and corporations to allocate more
for their tithe.

"Without tax incentives some people still give zakat.
Moreover, with the incentives, I believe more people will
contribute more zakat next year.

"Companies paying income tax could also receive a tax
reduction if they pay zakat. This will encourage those companies
to pay zakat," Tulus said in the gathering.

Sutiyoso also expressed optimism that the new rule would
empower Jakarta's many Muslims, especially those living in
poverty.

"We hope that with the new rule, we will help empower the
people," the governor said at the gathering organized by the
Muslim Charitable Donations Board (Bazis).

The tax incentives were incorporated in the decree by the
directorate general of taxation No. KEP.542/PJ/2001 dated August
1, 2001.

However, according to Article 9 verse 1 letter g of Law No.
7/1983 on Income Tax as amended by Law No. 17/2000, those
entitled to tax deductions would only be Muslims or companies
belonging to Muslims.

The zakat, according to the law, should be given to agencies
appointed or sanctioned by the government.

Sutiyoso noted that he would prepare a bylaw to support the
new rule. "We should first look into the law, then we will
produce a bylaw."

He also insisted that the management of money by agencies such
as Bazis must be properly accounted for.

"Bazis could also be audited by a public accountant. I have no
problem with that," Sutiyoso said before the gathering at the
Tennis Stadium in the Bung Karno Sports Complex.

The governor said, to uphold transparency, the financial
reports of the charitable board could also be announced regularly
in the media.

Bazis Jakarta has never been audited by a public accountant
and has yet to publicly report its financial situation.

"They would be committing a major sin if they 'ate' the money.
I believe they would not do that," Sutiyoso remarked.

Bazis Jakarta has thus far collected Rp 5 billion (US$485,000)
in Zakat and other charities as of Wednesday, including Rp 300
million from the evening's donations.

It has set a goal to collect a total of Rp 9 billion this
year, up from Rp 8 billion last year.