Implications of Waqf and Taxation in Public Finance

A Comparative Study between Islamic and Conventional Concepts

  • Mochammad Arif Budiman Politeknik Negeri Banjarmasin
  • Mairijani Mairijani Politeknik Negeri Banjarmasin
  • Muhammad Yassir Fahmi
  • Muhammad Mumtaza Rifqi
  • Nabila Fatiha Rizqina

Abstract

Abstract. This comparative study examines the implications of waqf and taxation in public finance, focusing on the conceptual differences between Islamic and conventional economic systems. Waqf, a voluntary and spiritually driven instrument in Islam, plays a crucial role in financing social infrastructures such as education, healthcare, and public services. Taxation, on the other hand, is a mandatory contribution within conventional systems, essential for state revenue and the provision of public goods. The study explores the philosophical foundations, collection mechanisms, and social impacts of both instruments. Through case studies from various countries, the research highlights the effectiveness of waqf in Muslim-majority contexts like Indonesia, Turkey, and Saudi Arabia, and compares it with successful tax systems in non-Muslim countries such as Sweden, Germany, and Singapore. The findings suggest that both waqf and taxation have unique strengths in promoting social welfare and economic development. Integrating these systems could offer a more holistic and sustainable approach to public finance, particularly in Muslim countries, where combining the voluntary nature of waqf with the structured framework of taxation may lead to more equitable wealth distribution and stronger social cohesion.

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Published
2024-12-18
How to Cite
Budiman, M., Mairijani, M., Fahmi, M., Rifqi, M., & Rizqina, N. (2024). Implications of Waqf and Taxation in Public Finance. Annual International Conference on Islamic Economics and Business (AICIEB), 4, 98-107. https://doi.org/https://doi.org/10.18326/aicieb.v4i0.676