Ministry Of Religion Says Companies Pay Zakat Get Tax Reduction

JAKARTA - Director of Zakat Empowerment and Waqf of the Ministry of Religion (Kemenag), Tarmizi Tohor said companies that pay zakat to official institutions can get tax reductions as stated in Law no. 23 of 2011 concerning Zakat Management.

"In Law 23 of 2011, article 22 states that the zakat paid by muzaki to zakat institutions is deducted from taxable income," Tarmizi said as quoted by ANTARA, Wednesday, June 21.

Tarmizi said the official institutions in question, namely the National Amil Zakat Agency (Baznas) and the Amil Zakat Institution (LAZ) had obtained permission from the Ministry of Religion.

In addition, he said, the provisions for reducing taxes are also regulated in Government Regulation (PP) Number 60 of 2010.

"Government Regulation Number 60 of 2010 states that zakat or religious donations that are mandatory can be deducted from gross income," he said.

Tarmizi explained that zakat or religious donations can both be reduced by taxes. Zakat income (for Muslims) who are taxpayers is paid to the amil zakat body or the amil zakat institution formed or ratified by the government.

Meanwhile, religious donations that are taxpayers for adherents of other religions are paid through religious institutions formed or ratified by the government.

Tarmizi explained that there are several conditions in reducing taxes for companies that have zakat or channeling religious donations.

"In the regulation of the Director General of Taxes Number 6 of 2011, taxpayers who reduce zakat or religious donations that are mandatory, are required to attach a photocopy of proof of payment on the Tax Income Tax Annual Notification (SPT) for the Year of Taxation," he said.