Relevance of Zakat in Government

Relevance of Zakat and Tax in Government and Development

The relevance of Zakat in development today is to become an instrument of social welfare.

The function of tax is to finance the goverment that has the task to eradicate poverty which is one of the functions of the charity, although to date this charity has not become a source of state revenue.

The Directorate of Tax Regulation II Dasto Klesdyanto, On the National Seminar on Taxation & Zakat "On The Relevance of Development and Social Welfare".

Dasto further said, there are some thing that have been set associated with the charity in the taxation laws and regulations, which are received by the charity amil zakat charity or institution established or approved by the government. Well received by the recipient charity has entitled to be exempted from all taxes object has nothing to do with business, employment, ownership or control between the parties concerned.

In addition, the charity received by the agency or institution amil zakat established or approved by the government to reduce taxable income.

As stated in the Law No.38/1999 on the management of Zakat chapter IV of article 14 paragraph (3) that the charity has been paid to the agency or institution amil zakat deducted from taxable income or residual income tax from the taxpayer concerned in accordance with law and regulation.

Then in Law No.17 of 2000 thus only the third change or Law No. 7 / 1983 of income tax on the article (9) Paragraph (1) stated that in order to determine the amount of taxable income to the taxpayer in the country and form of business but must not minus property has assigned, assistance or donations.

Both of these laws is a maximum effort (at least for now) to accommodate the wishes of the Muslims (especially in Indonesia), so the first money payment for zakat and the second instead of taxes, as well zakat payments to reduce costs.

In addition, the relevance of Zakat in development today is to encourage productivity, and redistribution of assets and can be a social valve as well.