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

Abstract

Does Regulation Increase Zakat Payment?

Author(s): Agus Munandar, Akhmad Syakhroza, Dwi Martani, Dodik Siswantoro

The objective of this paper is to explore how zakat as tax deduction affects zakat payment. This topic is important for understanding corporate compliance to sharia and rules of the country. Using database of Thompson Reuters over 2007-2018, sample of this research comprises all islamic organization which discloses zakat payment. Final sample for this study is 709 observations. Different with previous study, this study is cross country analysis so that result of the study is more generable than before and look carefully at zakat as tax deduction. The finding indicates that regulation affects the zakat payment. Unfornately, the different between regulation which treats zakat as a deduction for taxable income and zakat as tax rebate is not significant. In addition, based on descriptive statistic finding, zakat payment in zakat as deduction from tax liability regulation is higher than zakat as deduction from taxabale income regulation. Results of this study provide empirical evidence to support government for confirming zakat law. This is the first study in cross country so that this finding lays some foundation for zakat law.