Zakat in Indonesian State Treasury Funds: Its Potential Obstacle and Abuse

Zakat (alms-giving) is a model of revenue distribution in Islamic Law. The historical concept of zakat is an Islamic state income. Islamic government collects zakat from wealthy moslem because they are obliged to take at least 2.5 % from their wealth to be donated to the poor. The collected funds of zakat were pooled in baitul maal (state treasury funds). The State then allocates them for mustahiq zakat (the recipient of zakat). Recently, the way moslems pay zakat especially in Indonesia has turned into individual obligatory expense (separated from the state budget). They usually complete zakat payment through traditional amil (zakat collectors) or nationally-registered zakat collecting institutions. It means that zakat is not purely a part of state income. However, the release of Indonesian Law Number 23, 2011 on Zakat Management brings about the discourse of the position of zakat in Indonesian Treasury Funds. It regulates the tax regressive for zakat payment provided that there is a valid receipt from registered amil. Later, the registered amil has to send an annual financial report to Official Zakat Collecting Institution and Indonesian Department for Religious Affairs. This mechanism raises the potency of national income generated from zakat. However, the later obstacle is how to manage zakat based on the principle of accountability and to avoid zakat abuse.