BOOSTING ZAKAT COLLECTION THROUGH MONETARY POLICY OBJECTIVE: EVIDENCE FROM INDONESIA

An'im Kafabih

Abstract


Many studies accept that zakat collection in Indonesia is far from its potency. The main cause that might affect this condition is that muzakki as zakat payers face systemic risk of economic condition. As government has monetary instrument to deal with systemic risk that is reflected by level of unemployment, then theoretically the effect of monetary policy objective will have the significant effect to zakat collection. Therefore, this paper tries to investigate the effect of inflation and real exchange rate, as form of monetary objective in Indonesia, to zakat collection. 45 observed monthly time series data are gathered and analyzed by ARDL bound test. The result shows that (1) inflation has nonlinear effect where, as level of CPI is more than 105,5, the increase in inflation will boost zakat collection. (2) any monetary policies that are directed to rise real exchange rate will have positive impact on zakat collection. (3) further finding shows that the effect of ied al fitr on zakat collection is about 1,764% higher rather than the effect of zakat collection outside the month of ied al fitr occurs

Keywords


Zakat collection, Monetary Policy Objective, Ied al fitr

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