The Role of Baitulmal as Department of Finance Through Fiscal Policy: Zakat as an Instrument

Abstract

This article delves into the utilization of Zakat, a fundamental aspect of Islamic fiscal policy, as an alternative fiscal instrument to address economic stability, growth, development, and equitable wealth distribution. Zakat, an inherent component of Islamic fiscal policy, plays a vital role in fostering socio-economic well-being and balance. The article examines the involvement of Baitulmal, a state institution, in macroeconomics matters through fiscal policies, emphasizing the dynamic function of Zakat within the national economy. Additionally, it explores the nomenclature and functioning of Zakat as fiscal tool, emphasizing its influence on the economy and its potentional alignment with fundamental economic objectives. The objective is to shed light on Zakat’s importance within the fiscal landscape and its potential to contribute to a more inclusive and balance economic development.