Integrating Zakat into Indonesian Fiscal System: a Propose Solution to Budget Deficit Program

Abstract

The COVID-19 pandemic has caused the failure of several economic sectors and exacerbated global economic conditions. The paper provides a comprehensive overview of fiscal policies during the time of the Prophet and in contemporary Indonesia. The purpose of this study is to produce concrete policy recommendations that can be implemented to integrate zakat into the Indonesian fiscal system as a solution to the budget deficit problem. The study utilizes a literature review method and collects secondary data from various sources. Data analysis is performed through a process of compilation and analysis to conclude a proposed solution to the budget deficit by integrating zakat into the Indonesian existing fiscal system. The result of this study shows that it is possible to integrate zakat as an Indonesian fiscal instrument, and it can be a solution to the budget deficit caused by the COVID-19 pandemic. The results of this paper suggest that the government can make zakat an alternative source of government revenue given its great potential and its compatibility with the government's poverty alleviation program.