THE IMPACT OF PRODUCTIVE ZAKAT ON INCOME INEQUALITY OF MUSTAHIQ IN YOGYAKARTA
Mitha Raihana (a), Anisya Pachmi (a), Susilo Nur Aji Cokro Darsono (b*), Hafsah Fajar Jati (c)

a) Department of Economics, Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia
b) College of Management, Asia University, Taiwan
c) International Program for Islamic Economics and Finance, Universitas Muhammadiyah Yogyakarta, Indonesia
*susilonuraji[at]gmail.com

Abstract

Inequality in income distribution is one of the economy problems that faced by most developing countries and Indonesia is one of them. In order to reduce the income gap, Islam proposes an instrument as the solution to solve this problem, such as Zakat. Zakat is not only an obligation for the Muslim but also has the goals to improve the economy condition in society. There is the movement of wealth from high income society to low income society in zakat, so the income will not be distributed in certain society. Zakat distribution can support to achieve one of the Sustainable Development Goals (SDGs) such as goals number 10 which is reduced inequalities. This research aims to analyze the effect of productive zakat on reducing the income inequality among Mustahiq. Survey by using questionnaire was applied in this research to find the data from Mustahiq population in Yogyakarta City. Lorenz Curve, Gini Ratio Index and World Bank Inequality Criteria were applied to analyze the inequality of income distribution. This research found that distribution of productive zakat was decreased the inequality of income among mustahiq as shown on the decreasing of area in Lorenz curve. Besides, Gini Ratio was also reduced from 0,37 to 0,30 which shows the decreasing of income inequality among mustahiq. Then, the proportion of income in 40% low income society increased from 16,65% to 21,36%.

Keywords: Income Inequality; Productive Zakat; Mustahiq

Topic: International Conference of Islamic Economic and Financial Inclusion

Link: https://ifory.id/abstract-plain/mFxjb6DaVwtM

Web Format | Corresponding Author (Susilo Nur Aji Cokro Darsono)