Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Do Zakat and Tax Payment Increase Islamic Organization Performance?

Author(s): Agus Munandar

The purpose of this study is to investigate the impact of zakat and tax payment on the firm financial performance. The Motivation for this research is obligation for Islamic organization to obey the sharia law and rules of the country, by tax and zakat payment. Besides that, previous studies focuses on single country and conventional industries. Our sample comprises all islamic organization which discloses their zakat payment and tax payment for the period from 2007 to 2017. In contrast to previous study, this research using zakat payment as a islamic compliance indicator and tax payment as government compliance. Besides that, this study is cross country analysis. Our results indicate that highly zakat payment firms are more likely to increases their ROE and ROA. Also, highly tax payment firms are more likely to increases their ROE and ROA. Further, corporate charitable giving especially zakat and tax payment is important platform in increasing its corporate performance. Results of this study provide support to government especially tax department to considers about integration between zakat and tax in government law.

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