The LOW PROPORTION TAX REBATE COMPARATIVE STUDY OF PROGRESSIVE LAWS ON FISCAL STRENGTHENING THROUGH THE INTEGRATION OF ZAKAT AND INCOME TAX IN INDONESIA AND MALAYSIA

Abstract

This study analyzes the potential application of the low-proportion tax rebate model as a zakat- based fiscal reform in Indonesia. Currently, zakat is only recognized as a tax deduction in accordance with Government Regulation No. 60/2010, which is considered ineffective in promoting compliance and economic redistribution. Through a normative-comparative qualitative approach, this study compares the Indonesian and Malaysian models with Satjipto Rahardjo's Progressive Law theoretical framework. The results show that the full rebate model in Malaysia increases compliance to 85%, but it is not realistic to implement it directly in Indonesia due to fiscal risks and limitations in digitalization. The low-proportion rebate model (maximum 30% of tax payable) is proposed as a transitional solution that balances social justice and fiscal stability. Its implementation requires the digital integration of the National Zakat Agency and Directorate General of Taxes, partial regulatory revisions, and massive public fiscal literacy education.