The Influence of Digital Transformation, Inflation, and Economic Growth on Zakat Growth: Evidence from Indonesian

M Bastomi Fahri Zusak

doi:10.54045/jeksyah.v6i01.3466

Authors

M Bastomi Fahri Zusak Universitas Diponegoro, Indonesia

DOI:

https://doi.org/10.54045/jeksyah.v6i01.3466

Keywords:

Zakat Growth, Digital Transformation, Inflation, Economic Growth

Abstract

This study investigates the complex relationship between digital transformation, inflation, and economic growth in influencing zakat growth in Indonesia. Drawing on panel data from 36 cities over the period 2020 to 2022, the research employs a fixed-effects regression model to examine in detail how varying levels of technological readiness, alongside broader macroeconomic conditions, affect the dynamics of zakat collection and distribution. The empirical findings indicate that, while digital transformation is theoretically expected to expand the zakat collection base, improve efficiency, and strengthen institutional performance, in practice it has thus far exerted a negative influence on zakat growth. This outcome can largely be attributed to the high transition costs associated with the early implementation phase, the uneven distribution of digital literacy, and the relatively low level of public trust in online payment platforms, which collectively limit the effectiveness of zakat mobilization. By incorporating both technological and macroeconomic dimensions into the analysis of zakat, this study not only advances the theoretical discourse within the field of Islamic economics but also provides practical insights and policy recommendations for enhancing the resilience, credibility, and inclusiveness of zakat institutions in the digital era, ultimately contributing to more sustainable and equitable socio-economic development.

References

Beik, I. S., & Arsyianti, L. D. (2016). Measuring Zakat Impact on Poverty and Welfare Using Cibest Model. Journal of Islamic Monetary Economics and Finance, 1(2), 141–160. https://doi.org/10.21098/jimf.v1i2.524

Chen, S., Alexiou, C., & Lee, S. (2024). Beyond binary: exploring the interplay of China’s digital transformation and firm performance through dual mechanism analysis. Asia Pacific Business Review, 00(00), 1–35. https://doi.org/10.1080/13602381.2024.2434010

Choiriyah, E. A. N., Kafi, A., Hikmah, I. F., & Indrawan, I. W. (2020). Zakat and Poverty Alleviation in Indonesia: a Panel Analysis At Provincial Level. Journal of Islamic Monetary Economics and Finance, 6(4), 811–832. https://doi.org/10.21098/jimf.v6i4.1122

Guo, X., Li, M., Wang, Y., & Mardani, A. (2023). Does digital transformation improve the firm’s performance? From the perspective of digitalization paradox and managerial myopia. Journal of Business Research, 163, 113868. https://doi.org/https://doi.org/10.1016/j.jbusres.2023.113868

Hadi, R., Shafrani, Y. S., Hilyatin, D. L., Riyadi, S., & Basrowi. (2024). Digital zakat management, transparency in zakat reporting, and the zakat payroll system toward zakat management accountability and its implications on zakat growth acceleration. International Journal of Data and Network Science, 8(1), 597–608. https://doi.org/10.5267/j.ijdns.2023.8.025

Hudaefi, F. A., Caraka, R. E., & Wahid, H. (2021). Zakat administration in times of COVID-19 pandemic in Indonesia: a knowledge discovery via text mining. International Journal of Islamic and Middle Eastern Finance and Management, 15(2), 271–286. https://doi.org/10.1108/IMEFM-05-2020-0250

Judijanto, L., & Ilhamiwati, M. (2024). Analysis of Zakat as an Alternative Fiscal Instrument in Supporting Economic Development in Indonesia. West Science Islamic Studies, 2(04), 170–177. https://doi.org/10.58812/wsiss.v2i04.1346

Kafabih, A. (2024). The Nonlinear Impact of Inflation on Zakat Collection in Indonesia. Share: Jurnal Ekonomi Dan Keuangan Islam, 13(2), 825–848. https://doi.org/10.22373/share. v13i2.24202

Kasri, R. A. (2016). Effectiveness of Zakah Targeting in Alleviating Poverty in Indonesia. Al-Iqtishad: Journal of Islamic Economics, 8(2). https://doi.org/10.15408/aiq.v8i2.3005

Kasri, R. A., & Yuniar, A. M. (2021). Determinants of digital zakat payments: lessons from Indonesian experience. … of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-08-2020-0258

Maulida, S., Amruzi, F., Hakim, B., & Beik, I. (2022). Problems and solutions in zakat digitalization: Evidence from South Kalimantan, Indonesia. Jurnal Ekonomi & Keuangan Islam, 8, 94–109. https://doi.org/10.20885/jeki.vol8.iss1.art7

Mirghaderi, L., Sziron, M., & Hildt, E. (2023). Ethics and Transparency Issues in Digital Platforms: An Overview. In AI (Vol. 4, Issue 4, pp. 831–843). https://doi.org/10.3390/ai4040042

Mohd Ali, A. F., Rashid, Z. A., Johari, F., & Muhammad, M. R. (2015). The effectiveness of Zakat in reducing poverty incident: An analysis in Kelantan, Malaysia. Asian Social Science, 11(21), 355–367. https://doi.org/10.5539/ass.v11n21p355

Monzer Kahf. (1999). The performance of the institution of zakah in theory and practice. International Conference on Islamic Economics Towards the 21st Century, 1–40.

Mutamimah, M., Alifah, S., Gunawan, G., & ... (2021). ICT-based collaborative framework for improving the performance of zakat management organisations in Indonesia. … and Business Research. https://doi.org/10.1108/JIABR-05-2020-0154

Nayak, V., & Hegde, K. P. (2023). Examining the Impact of Wealth Redistribution through Zakat. Millah: Journal of Religious Studies, 22(2), 285–312. https://doi.org/10.20885/millah.vol22.iss2.art1

Nurrizka Puji Lestari, & Ilmiawan Auwalin. (2022). Zakat and Income Inequality in Indonesia: Panel Data Analysis in 34 Provinces. Jurnal Ekonomi Syariah Teori Dan Terapan, 9(6), 898–912. https://doi.org/10.20473/vol9iss20226pp898-912

Prawoto, N., & Basuki, A. T. (2024). the Influence of Zakat and Macro Variables on Economic Growth. Corporate Law and Governance Review, 6(2), 54–63. https://doi.org/10.22495/clgrv6i2p5

Razak, S., Nasuka, M., Syahabuddin, Arsyad, K., & Darwis, M. (2024). Strengthening Zakah Compliance Among Indonesian Muslims Through the Role Ofinstitutional Capabilities. Journal of Islamic Monetary Economics and Finance, 10(3), 497–520. https://doi.org/10.21098/jimf.v10i3.2081

Rizal, S. (2023). Digitalization of Zakat in Stimulating Community Socio-Economic Development in the Middle of the Covid-19 Pandemic (Maqashid Syariah Perspective). European Journal of Humanities and Social Sciences, 3(1 SE - Articles), 23–33. https://doi.org/10.24018/ejsocial.2023.3.1.384

Sarea, A. M., & Hanefah, M. M. (2013). The need of accounting standards for Islamic financial institutions: evidence from AAOIFI. … Islamic Accounting and Business Research. https://doi.org/10.1108/17590811311314294

Syafira Fauzia, A., Mulatsih, S., & Alexandi, F. (2021). Mapping the Potential of Zakat Collection Digitally in Indonesia. International Journal of Zakat, 6(3), 1–22.

Wahyuni, P., & Wulandari, R. (2024). Zakat and poverty alleviation in Muslim countries: A Biblioshiny application. Journal of Islamic Economics Lariba, 10(1), 205–230. https://doi.org/10.20885/jielariba.vol10.iss1.art12

Wooldridge, J. M. (2016). Introductory Econometrics, A Modern Approach (5th ed.). South Western Cengage Learning.

Wu, Y. (2025). № 1 | 2025 Higher School of Economics 70 Y. (2025) Can ESG Buffer the Pains of Digital Transformation? Evidence from Chinese Listed Companies. Journal of Corporate Finance Research, 19(1), 70–97. http://creativecommons.org/licenses/by/4.0/