The Impact of Zakat Against Poverty Alleviation, Inequality & Economic Growth Case Study of Indonesia

Abstract

The purpose of this study is to investigate the impact of zakat in term of poverty alleviation, income distribution in the society and accelerating economic growth of the country. The study has employed annual time series data from company’s financial statement from IDX and data states from Indonesia (BPS) over the period of 2007 up to 2016. The tools in the method used were normality, multicollinearity, heteroscedasticity, and autocorrelation. The data were analyzed using statistical software – SPSS 20. The study finds that zakat has a positive impact on economic growth. Furthermore, the impact is huge and long term. Hence, this study recommends that zakat payment and distribution should be not limited to the fulfillment of consumable needs only, but also should cover other forms of monetary aid that can improve the economic growth.