Religiosity in Paying Zakat and Tax Compliance in Medan City.

Abstract

Zakat is a form of almsgiving which is collected by the Muslim Ummah. It is considered in Islam to be a religious obligation, and in terms of importance in Quranic standing, it is next in line after prayer. Zakat is thus a way for the people to channel their wealth to those who are less fortunate. Zakat is due for a Muslim when one's Zakatable wealth increases to a minimum threshold or nisab and also once a lunar year or hawl passes while one's Zakatable wealth withstands the lowest threshold. A Muslim only pays Zakat when they have been in possession of the nisab (minimum amount of wealth) for a period of at least a full lunar year. The payment of Zakat is strongly influenced by the value of individual religiosity as a basic form of attitude and knowledge to show obedience. The emergence of a policy to pay Zakat can help to reduce taxes for taxpayers in Indonesia, which is one of the efforts made to grow the productivity of Zakat. Zakat and taxes are very dependent on their management, but from a legal perspective, their implementation must be kept separate. This research examines how a person's religiosity affects compliance in paying Zakat, which can increase tax revenues in Medan. Qualitative research methods with a desk research approach were used. The study results show that the value of religiosity dramatically influences the people of Medan to pay Zakat. Religiosity is variously interpreted as worship that encourages paying Zakat, thus giving rise to different characteristics in attitude, willingness, and compliance to pay taxes. In implementing the policy of paying Zakat to cut taxes, many people still need to know more about it. The role of Zakat institutions still needs to be improved in providing socialization and creating greater awareness thereof. This raises an attitude of trust in paying Zakat to institutions close to their environment compared to institutions recognized by the government. This condition arises because of the high value of religiosity, which is more concerned with distributing Zakat than administrative issues so that it can be recognized as a tax reduction. Meanwhile, the moral community tends to emphasize the community's religiosity value as a basis for compliance in paying Zakat.