ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 1 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI Siti Mudrikah1)*, Muhamad Nafik2 1,2Department of Islamic Economics, Faculty of Economics and Business, Airlangga University, Indonesia Abstract Islamic public finance is a theme that has been discussed by several previous scholars, such as Ad Dawudi in his book AL Amwal. In this paper, the author examines his writings on the source of state finance through state revenue, namely zakat. Zakat according to Ad Dawudi has a role to eliminate social disparities between the rich and the poor, creating a high sense of solidarity. This study uses a literary study of the book Al Amwal by Abu Ad Dawudi as the first source. His thinking said that zakat was able to provide economic support, even his thoughts were used in the Fatimid government. At that time, his country was experiencing the chaos of corruption and social inequality. Then the incident is relevant to the state of declining economic growth in Indonesia, one of which is marked by increasing poverty. Ad Dawudi's thought regarding zakat is expected to be able and relevant to be used to make policies in Indonesia, especially Indonesia has the largest Muslim community. Keyword: Ad Dawudi, Islamic Public Finance, Zakat, Poverty, Islamic Economics 1. INTRODUCTION Economic conditions are not the only main indicator to measure the level of people's welfare. A country will be seen as a country that is prosperous when it has an established economic system and sufficient income. The country's economic success can be seen in the welfare of its people. Whether from the poverty level, the unemployment rate, the health level, or the income level of people living in a country. For this reason, economics is important in human life. If a country must have a source of wealth or income that is used for economic activity in that country, it is called, to run it, the state needs a system that regulates state finances. Public finance is a part of economics that studies government financial activities. It also discusses the rules regarding fiscal policy, namely policies related to government spending and revenue (M & Syahputra, 2013). s As complete teaching of life, Islam guides activities that humans need, including the economy. The goal of Islam is to achieve Falah, namely prosperity in the world and the hereafter, that is the reason why Islamic public finance is important to study. * Corresponding author. Email address: mumuds294@gmail.com https://creativecommons.org/licenses/by/4.0/ mailto:mumuds294@gmail.com AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 1 2021 2 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) In this paper, the writer examines public finances based on Ad Dawudi's thoughts. Ad Dawudi gave his thoughts on how to manage the income and expenditure of a country. He classified income for the non-zakat category into two categories, namely periodic and non- periodic income. Periodic income (jizyah, kharaj, ushr) includes, fai and ghanimah. At the point of spending, Ad Dawudi divided it into 5 categories, namely military, development, administrative and civil servants, social support, and special zakat expenditures. Furthermore, this paper will analyze the relevance of Ad Dawudi's thought, especially (state financial revenue) on poverty in Indonesia. At that time Ad Dawudi's thought was based on a case or history during the Fatimid reign. 2. LITERATURE REVIEW Islamic Public Finance According to Arifin P. Soeria (1986), Atmadja defines state finances in terms of accountability by the government, that state finances that must be accounted for by the government are state finances that only come from the state budget. So that what is meant by state finance is finance originating from the State Budget. Arifin P. Soria Atmadja describes the dualism of the definition of state finance, namely the definition of state finance in a broad sense and the meaning of state finance in a narrow sense. finance originating from the APBN, APBD, Finance for State Business Units or state-owned companies, and essentially the entire state assets. Meanwhile, the definition of state finance in the narrow sense is finance originating from the APBN only (Arfah, 2020). Islamic public finance is finance that is managed for the benefit of society, whether managed individually, collectively, or managed by the government. According to Monzer Kahf, the issue of public finance that includes public revenues (public revenueserlu) and public expenditure (public expenditure) has two criteria, that is: a. to serve well the interests of all members of the Muslim community. b. to organize these interests based on revelatory sources, namely Al-Quran and Hadith (Gultom, 2019). Islamic public finance includes two things, namely the revenue and expenditure sectors. Before the next discussion, it is necessary to know that Islam has the principles of Islamic economic policy which form the basis of economic activity, including: The supreme power belongs to Allah and Allah is the absolute owner of all that exists a. Humans are the leaders (caliph) of Allah on earth but not the less fortunate owners have rights over some of the wealth owned by the more fortunate groups b. Wealth must not be accumulated and hoarded c. Wealth must be rotated d. Economic exploitation in all its forms must be eliminated https://creativecommons.org/licenses/by/4.0/ ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 3 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) e. Eliminating the gap between individuals in the economy can eliminate conflict between groups by sharing one's own after death with his heirs f. Establish obligations that are mandatory and voluntary for all individuals, including poor members of society Principles of Acceptance of Islamic Public Finance From a historical review of the public acceptance of Islam, it can be shown that the various forms of public funding sources have been determined by the current government such as kharaj, khums, jizyah, and so on (Ningrum, 2014). Zakat a. Definition of Zakat Etymologically zakat in the book Mu'jam Wasit as quoted by Dr. Yusuf Qardawi is a basic word which means blessing, growing, clean, and good. Quoting the opinion of Sulaiman Rasjid that zakat in terminology is a certain level of the property, which is given to those who are entitled to receive it, with several conditions (Ali, 2014). Meanwhile, according to Hafidhuddin (2008) in language, zakat means to grow and develop. The word zakat has several meanings, namely al-barakatu which means blessing, an-namaa which means growth and development, at-thaharatu which means purity, and ash- shalahu which means success. In terms, zakat is defined as assets with certain conditions, which Allah SWT requires to the owner (muzakki) to be submitted to those who are entitled to receive it (mustahik) with certain conditions (Beik, 2009). The groups who are entitled to receive zakat have been regulated in the teachings of Islamic law, namely, there are eight groups, namely poor, poor, amil, converts, niqab (slaves), gharimin, fi sabilillah (people who struggle in the way of Allah), and ibnu sabil (people who are on his way) (Mubarokah et al., 2018). This provision is regulated in the Qur'an, letter At-Taubah, verse 60, which means Zakat is only for the needy, the poor, amil zakat, who softens his heart (converts), for (frees) the slave, for (frees) those who are in debt, for the way of Allah, and for those who are on their way, as duty from Allah. Allah is All-Knowing, All-Wise. (Translated by Kementerian Agama, 2002). b. Wisdom of Zakat There are 3 pearls of wisdom of zakat according to (Ali, 2014) that is: 1) Faidah Diniyyah (religious aspect) a. Tithe delivers a servant to the happiness and salvation of the world and the hereafter. b. Means for servants to taqarrub (get closer) to Allah, will increase faith because of its existence which contains several kinds of obedience. c. Zakat payers will get a large reward that is multiplied, as in the word of Allah SWT which means, https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 1 2021 4 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) "Allah destroys usury and fertilizes alms. And Allah does not like everyone who remains in wisdom, and always sins ". d. Zakat is a means of removing sins. 2) Faidah Khuluqiyyah (in terms of morals) a. Instilling the nature of nobility, tolerance, and generosity in the individual paying zakat. b. The payer of zakat is usually identical with the nature of mercy (compassion) and gentle towards his brother who does not have it. c. It is a reality that contributing something of the body to the Muslims will enlarge the chest and expand the soul because it is certain that he will become a person who is loved and respected according to the level of sacrifice. d. In zakat there is a purification of morals. 3) Faidah Ijtimaiyyah (social aspect) a. Zakat is a means to help fulfill the needs of the poor who are the majority group of most countries in the world. b. Provide strong support for the Muslims and elevate their existence. This can be seen in groups of zakat recipients, one of which is Mujahidin fi sabilillah. c. Zakat can reduce social jealousy, resentment, and resentment that exist in the chest of the poor because the lower class will be easily drowned in hatred and hostility if they see high economic groups squandering such abundant wealth to alleviate poverty, harmony, and love will certainly be established. the love between the rich and the poor. d. Zakat will spur the economic growth of the perpetrators and what is clear is that the blessings will be abundant. e. Paying zakat means expanding the circulation of property or money because when assets are spent, the circulation will expand and more parties will benefit (Ali, 2014). Poverty According to Spicker and Gaiha (1993) in the Coordination Team for the Formulation of Poverty Reduction Policies (2004), it is said that poverty is better understood together with other social problems, such as hunger, disease, unemployment, overpopulation, environmental destruction, the consequences of conflict social. The Central Bureau of Statistics (BPS) defines poverty with the food and non-food poverty line standards. The food poverty line, namely the value of consumption expenditure on basic food needs equivalent to 2100 calories per capita per day. The non-food poverty line is the amount of rupiah to meet the minimum non-food needs such as housing, health, education, transportation, clothing, and other goods/services. https://creativecommons.org/licenses/by/4.0/ ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 5 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Meanwhile, the BKKBN uses the household unit to measure the level of poverty. Poverty lies with the Pra Sejahtera (Pra KS) and the I Prosperous Family (KS 1) which are marked by the difficulty of fulfilling economic and non-economic needs. Besides referring to poor individuals and households, poverty measures are also approached by observing poor areas. There is a strong relationship between poor areas and poor people, so knowing the poor areas can be expected to find the majority of the poor (Rejeki, 2006). Therefore, an adequate definition of poverty must include a definition of poverty which has various dimensions (SMERU, 2001), including: a. inability to meet basic consumption needs (clothing, food, shelter) b. lack of access to other necessities of life (health, education, sanitation, clean water, and transportation); - no guarantee of the future (because there is no investment in education and family) c. vulnerability to shocks that are both individual and mass d. low quality of human resources and limited natural resources; - not involved in community social activities e. lack of access to employment and sustainable livelihoods; - social disabilities and disadvantages (neglected children, women victims of domestic violence, poor widows, marginalized and isolated groups) (Rejeki, 2006). Factors Causing Poverty Sharp in Mudrajad (1997) tries to identify the causes of poverty from an economic perspective. a. On a micro level, poverty arises because of the unequal patterns of resource ownership which result in an unequal income distribution. The poor have only a limited number of resources and are of low quality. b. Poverty arises from differences in the quality of human resources. Low quality of human resources means low productivity, which in turn low wages. The low quality of human resources is due to low education, unfortunate fate, discrimination, or heredity. c. Poverty arises due to differences in access to capital. These three causes of poverty will lead to the vicious circle of poverty theory. The existence of underdevelopment, market imperfection, and lack of capital cause low productivity, which in turn, result in the low income they receive and will have implications for low savings as well as investment (Rejeki, 2006). 3. RESEARCH METHODOLOGY This research is qualitative and uses library research (Library Research). Qualitative research is a research procedure that produces descriptive data in the form of written or spoken words from people and observable behavior according to Moleong (2008: 9). This https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 1 2021 6 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) research methodology is called qualitative research because it maintains the originality of the data in its qualitative form. Sources of data in this study consist of primary data and secondary data. The primary data source in this study is Ad Dawudi's book, Al Amwal. Secondary data in this study are used to complement and support information on the object of research in the form of books, papers, and articles related to the object of research. The data collection method used in this research is the documentation method. The data obtained in this study were further analyzed using the content analysis method (Arfah, 2020). 4. DISCUSSION A brief history of Abi Ja'far Ibn Nasr Ad Dawudi Abi Ja'far Ibn Nasr Ad Dawudi Al-Asadi Al Musili At-Tharabulusi At Tilimsani Al Maliki or another name, Ad Dawaudi, who composed a book entitled Al-Amwal. He is well known as a hadith expert from the Maliki school of thought who was born in biskirah. According to Salahuddin Husain Khudair, he lived during the Fatimid dynasty in northern Africa which was founded in (296 H / 910 M- 567H / 1173M) which had cities in Raqqadah, then Mahdiyyah, and Mashuriyah. During this reign, the school used was Shia which also became the official school of the country. This school of thought contradicts the Sunni school of thought so that there is a conflict in the process of spreading the Shia school of thought. Ad Dawudi is a figure who fortifies the Ahlussunah and strongly opposes the Shia group during the Bani Ubayd government (Razali & Febriansyah, nd). The political development at that time illustrated that the official school of the state was the Ismaili Shiite sect. This school is very contrary to the Sunni school which has existed for a long time in the Maghrib region, so it is not surprising when the spread of this Shia school has fallen victim, especially from scholars who have different directions from them. The Sunni schools that were scattered were the Hanafi and Maliki schools, but the followers of the Hanafi school became a little less with the fading of the Abbasid Daulah. There are also other schools such as the Ibadhiyah school and mu'tazilah. It was very different from the time of Lidinillah's mu'iz as caliph, which was the golden age in Fatima's reign. Because he really loved knowledge and honored scholars, so he was tolerant towards scholars of the Sunni sect in particular. In the daily economic development, the main livelihood for the Maghrib population at that time was agricultural products, because the results of agriculture were more developed than other incomes. However, there are also other economic activities such as imports, as well as the area around the north of Ifriqiya which is mostly engaged in fishermen with income like pearls. Historians and scholars have different opinions about the year he died. Ibn Makhluf argues that he died in 440 H. Zarkaly determined it in 307 AH while the majority of scholars https://creativecommons.org/licenses/by/4.0/ ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 7 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) argue that Ahmad Ibn Nasr al-Daudi died in 402 AH (1011 AD) .26 Among them al-Qadhi 'Iyadh, Ibn Farhun and Zahabi. He died in Tilimsani (M & Syahputra, 2013). Islamic Public Finance The discussion in this paper examines public finance in Indonesia which will then be analyzed using Ad-Dawudi's thinking. a. State Finance in Indonesia Definition of State Finance according to Soeriaatmadja (2010) are rights and obligations that can be valued in money and everything in the form of money or goods is made "State Property Rights". Meanwhile, the scope of state finance includes state revenue, state expenditure, state debt and loans, financial policy (fiscal, monetary, and international financial policy). According to research conducted (Atmaja et al., 2019) said that there are three sources of state income, namely: 1) Taxes a. domestic trade tax. a) oil and gas tax, b) value-added tax including luxury tax, c) land and property tax, d) ownership tax on land and building, e) customs, and f) other taxes including interest payments. b. International taxes come from import and export tariffs, not taxes, and grants. Then based on a report from Soeriaatmadja (2010) states that in the category of state revenue or revenue, namely: a. The benefits of companies include: BUMN, both PMA and PMDN companies b. Tax c. Creating new money d. Borrow from the bank e. Loans to the community f. Fines 2) Non-tax revenues include: a. Natural resource revenues including oil, gas, mining, forestry, and fisheries. b. Dividends for State-Owned Enterprises. c. Other income includes sales and rent, service income, interest and education, and d. income from public service agencies. 3) Grants come from within and outside the country for various purposes such as funding education programs, village development, and urban planning, water and sanitation programs, subsidies, and others. Such grants can be managed by ministries or local governments. https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 1 2021 8 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) In Islam there are also several alternative sources of state revenue that can be taken. The source of state revenue has been determined in the Koran and made clear in the hadith. One of the main state revenues in Islam is zakat. Zakat is the axis and financial center of the Islamic state. Zakat has different benefits in terms of certain fields, among others. Moral, social and economic fields. Zakat in the moral field, namely zakat can erode and eradicate greed. In the social field, zakat acts as a mediator which is used to realize that fellow humans must have a sense of social responsibility with one another. In the economic sector, zakat has many functions, among others. First, as an instrument to close the gap between the rich and the poor. Second, distributing income so that the assets do not stop in the hands of a mere few people (M & Syahputra, 2013). Public finance according to Ad Dawudi There are 2 categories of public finance according to Ad Dawudi, namely state-specific income and general state income. The general state income is included in the matter of zakat. And zakat is very popular as an instrument in Islamic public finance. 1. Zakat distribution Ad Dawudi mentioned the argument about zakat distribution as written in chapter X about zakat: "In fact, zakat is taken from the Muslims as purification for them" source Ahmad Ibn Nasr al Dawudi, al Amwal, p. 151 in (M & Syahputra, 2013). 2. Types of Zakat According to Ad Dawudi, there are many types of zakat, but here the author will focus on zakat as a source of state financial revenue. In the state there is a difference between state revenue and revenue, revenue is money that goes to the state treasury, that is, all forms of deposits that are received and entered into the state treasury account, while state revenue is the right of the central government which is recognized as an addition to the value of net assets, meaning all state revenue. be the right of the central government relating to the implementation of the main tasks and functions of the office/work unit/state ministry/institution (M & Syahputra, 2013) Ad-Dawudi's thoughts in the book Al-Amwal which he wrote are divided into four (4) parts. First, special ownership and prohibition of infringement of property rights. Second, income and expenses, this chapter deals with offices, payroll, and land law in northern Africa. Third, Zakat, Ghanimah and Jizyah, Fathu Makkah, Wages for Mujahidin, Gifts for Umara, Wars and peace in Daulah Islamiyyah. Fourth, assets whose growth value is unknown (Syahputra, 2013). As long as he was alive, his thoughts could be accepted and practiced by the government to collect ghanimah and fai 'as income for the government, but in a modern https://creativecommons.org/licenses/by/4.0/ ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 9 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) world like this, it would be seen as something backward considering that thought was related to war for the purpose of wealth, so that the Ad- Dawudi regarding sources of income (ghanimah and fai) can be considered irrelevant for current practice in the modern world. However, zakat as an annual obligation of Muslims is still practiced and managed today, but its use no longer reflects the original idea of being a source of income for the government. However, the aim of being distributed to mustahiq in the present is generally in line with the life of Ad-Dawudi. Ad-Dawudi also emphasized that spending on national defense must be balanced with spending on social services. Ad-Dawudi discusses the inequality in society which can mainly be seen between the rich and the poor. Although many scholars of his time debated whether to be rich or poor was preferable, Ad-Dawudi intends to discuss more about what can be done to solve social and economic problems in society. Ad-Dawudi's efforts will reduce the inequality between the rich and the poor and in the end, will bring more justice to the social life of a country. Like what is being experienced by Indonesia at this time of increasing poverty (Atmaja et al., 2019). With Ad Dawudi in mind, namely the importance of Kafāf or sufficient income as a basis for social security. Kafāf according to Ad-Dawudi reflects the minimum condition of a Muslim's income which allows him to pay zakat as the main obligation in Islam. The ability to pay zakat is expected to prevent Muslims from being exploited by the misery of poverty. Poverty at some point may lead poor people to take to the streets asking for help from others or becoming beggars. To avoid family and community members trapped as beggars, Ad-Dawudi emphasized the importance of economic support as part of social solidarity, to create the good character and not make begging (begging) as a source of income (Atmaja et al., 2019). Ad-Dawudi's ideas regarding inequality, social security and social solidarity are still relevant when practiced with the current situation and condition of public finances in Indonesia. Ad Dawudi's thoughts on zakat are expected to be a solution to the problems experienced in Indonesia today. If you look deeper into the concept of zakat, it is to give your property to others without expecting the money to come back, or without giving any conditions to people who receive zakat. According to the author, this is the reason why zakat has a big role in the economy, especially in Indonesia. Adam Smith Theory Relationship with Zakat M. A Mannan said that there is a difference between zakat and conventional sources of state finance. MA Manan linked zakat with Adam Smith's theory of taxation. First, according to the norm of equality. The purpose of the equation here is that the equation is not in the amount issued by each individual. Each individual should have a different proportion or amount that must be spent. Analysts like this between the rich and the poor have different proportions in paying taxes, and automatically there will be more to the https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 1 2021 10 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) rich than the poor. Likewise with zakat. A richer person will have more wealth than a poor person, even these assets will be given to the poor following the provisions of the tithe. Second, the norm of certainty. In Indonesia, taxes are regulated by the government, the amount to be paid, the time of payment, etc. Neither is zakat. Even in the Koran and Hadith, it is stipulated how much assets are spent on various types of zakat along with the time (haul). Third, the norm of convenience. This norm says that there is convenience regarding then in paying taxes (M & Syahputra, 2013). Meanwhile, according to Adam Smith (1723-1790) in (Razali & Febriansyah, nd) regulations in taxation must have basic principles, namely: 1. Taxes may not be made by bargaining, taxes are regulated in law and the regulations are binding in general, clear and firm. This means that here it does not have a double meaning, cannot be interpreted and must be transparent. Likewise, zakat also has clear rules, the consequences of not paying zakat when it reaches the nisab have also been explained in Islamic law. Sources of Islamic law Al Quran and Hadith are sources that are binding, firm, clear, do not contain multiple meanings, cannot be interpreted, are transparent and visionary. 2. The principle of equalization. According to Adam Smith, equalization means that people who are in the same situation must be subject to the same tax. Tax collection in the community should be carried out with capability and in balance with the income that is owned by the community. Zakat payments are made when the nisab limit has been reached. Regardless of whether he comes from a different ethnicity and race, when the property has reached its nisab, the property must be zakati. In other words, the more property a person has, the more zakat is issued. 3. The principle of convenience is the tax collection carried out by the government when society is experiencing an economic recovery. From that understanding, it can be interpreted that tax collection is carried out when people receive income. So flexibility and the right timing must also be considered when collecting taxes. For example, with a pandemic like this, tax collection requires new regulations, such as relief. The Prophet Muhammad SAW also underestimated the estimates of plants and fruits when there was a famine (Razali & Febriansyah, nd). The outbreaks that occurred in various countries have had a very strong impact, including Indonesia, so it is not wrong for the government to provide relief on electricity tax collection. 4. The principle of economic efficiency. This principle says that the collection of taxes is carried out economically. In this case, the benefits of tax and zakat must reach the community, do not run out for operations and management alone, so that the initial purpose of the benefits of zakat and zakat is not conveyed properly. https://creativecommons.org/licenses/by/4.0/ ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 11 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Poverty and zakat The number of poor people in March 2020 was fantastic, reaching 26.42 million people. This number experienced an increase of 0.56 percent or 1.63 million people when compared to 2019 an increase of 1.28 million people. The factors that cause the poverty rate to increase in 2020 are first, there is a slowdown in the growth of household consumption expenditure in the first quarter of 2020. Second, there has been a decrease in the number of foreign tourists visiting Indonesia so that supporting indicators are also affected. Third, there was an increase in retail prices for several main commodities, including rice (1.78 percent), broiler chicken (5.53 percent), cooking oil (7.06 percent), sugar (13.35 percent), and eggs. purebred chickens (11.10 percent) (source: money.kompas.com). Apart from the above factors, the disparity in poverty between urban and rural areas is still high, given the geographical condition of Indonesia which is composed of various islands so that this disparity occurs. BPS noted that the number of poor people in urban areas increased by 1.3 million to 11.16 million people, which initially reached 9.86 million poor people in 2019. Meanwhile, the number of poverty in rural areas reached 333.9 thousand people, from the original 14.93 million people in 2019 to 15.26 million people in 2020. The pandemic has hit all levels of society, especially the lower class. Source: bps.go.id After mentioning several factors that cause poverty in Indonesia, Islamic economics provides an alternative, among others, through zakat. Maximizing the potential for zakat. According to a study conducted by Puskas BAZNAS, the potential for zakat in Indonesia reaches 233.8 trillion, while it is known that the national ZIS collection in 2019 through official OPZ has reached 10 trillion or still 5.2 percent of the zakat potential (Source: baznas.go.id). although the potential for zakat is very https://creativecommons.org/licenses/by/4.0/ AFEBI Islamic Finance and Economic Review (AIFER) Volume 6, No 1 2021 12 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) high, in reality it is still far from expectations. The absorption of this potential is not an easy matter requiring the role of the government and society as the perpetrators. In Indonesia, the government does not provide zakat obligatory regulations such as tax obligations. Most people still pay zakat to mosques or are given lasung to mustahik, for reasons of distrust of institutions, the absence of institutions to remote areas, lack of socialization or many other reasons that the writer analyzes based on the experience of the surrounding environment. so it can be said that there are still several factors why the potential for zakat is not maximally absorbed. When muzakki gives lasung to mustahiq, what happens here will appear only the consumptive value, so that zakat funds have no continuation of benefits. When zakat only has consumptive benefits, this will not be able to reduce poverty continuously or the benefits of zakat will not last long. The benefits of zakat can be felt by mustahiq in just a matter of days. Even though it is not that simple, if zakat is managed properly, the value of benefits is developed, it will be useful in the future so that the benefits of zakat funds will be more productive. For example, it is given in the form of capital for MSME players. So zakat funds which initially only have a consumption value will switch to productive value, resulting in a circulation of money. Especially in the current pandemic era, zakat should have a very superior role. Because providing capital assistance does not require excessive money first. For example, MSMEs that need capital support to get back up after experiencing shocks for about 2 years. The poverty that occurs today must receive attention from above (government) and from below (neighbors, small communities, and the entire Indonesian nation). Following Ad Dawudi's thinking, the government must take a role, but the community must also take a role. Increase a high sense of solidarity and understanding of the problems currently being faced. CONCLUSION Ad Dawudi's thoughts on Public Finance are indeed very important to study. Because of his extraordinary thoughts about the concept of zakat. The concept of zakat is relevant to the current situation. Even his thoughts were used in the government of the Fatimid dynasty. This study will analyze Abu Dawudi's thoughts on its relevance to the existing situation in Indonesia, which is currently experiencing problems, namely poverty. Zakat is one of the superior instruments when viewed from its potential and existence for the Indonesian nation, the majority of whom are Muslims. REFERENCE Ali, R. (2014). ZAKAT DALAM PERSPEKTIF EKONOMI ISLAM Ali Ridlo. Jurnal Al- ‘Adl. https://creativecommons.org/licenses/by/4.0/ ISLAMIC PUBLIC FINANCE INSTRUMENTS ACCORDING TO KITAB AL AMWAL BY AD DAWUDI 13 Published by AFEBI Islamic Finance and Economic Review This is an open access article under the CC BY SA license (https://creativecommons.org/licenses/by/4.0/) Arfah, T. arfah. (2020). Keuangan Publik Dalam Perspektif Ekonomi Islam. Jurnal Islamika, 3(2), 24–35. https://doi.org/10.37859/jsi.v3i2.2121 Atmaja, F. F., Asmuni, & Andriansyah, Y. 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ANALISIS PENANGGULANGAN KEMISKINAN MELALUI IMPLEMENTASI PROGRAM P2KP DI KOTA SEMARANG ANALISIS PENANGGULANGAN KEMISKINAN MELALUI IMPLEMENTASI PROGRAM P2KP DI KOTA SEMARANG. Ali, R. (2014). ZAKAT DALAM PERSPEKTIF EKONOMI ISLAM Ali Ridlo. Jurnal Al- ‘Adl. Arfah, T. arfah. (2020). Keuangan Publik Dalam Perspektif Ekonomi Islam. Jurnal Islamika, 3(2), 24–35. https://doi.org/10.37859/jsi.v3i2.2121 Atmaja, F. F., Asmuni, & Andriansyah, Y. (2019). An islamic economic perspective of public finance in Indonesia based on ad-Dawudi‘s thought in Kitab Al-amwal. International Journal of Scientific and Technology Research, 8(6), 276–279. Gultom, R. Z. (2019). Keuangan Publik Islam: Zakat Sebagai Instrumen Utama Keuangan Negara. Hukum Islam, 19(2), 100. https://doi.org/10.24014/jhi.v19i2.7977 M, A. I. B. N. N. A. W. H., & Syahputra, R. (2013). Analisis Pemikiran Tentang Keuangan Publik Studi Kitab AL-AMWAL. Institut Agama Islam Sumatera Utara. Mubarokah, I., Beik, I. S., & Irawan, T. (2018). Dampak Zakat terhadap Kemiskinan dan Kesejahteraan Mustahik (Kasus : BAZNAS Provinsi Jawa Tengah). Al-Muzara’ah, 5(1), 37–50. https://doi.org/10.29244/jam.5.1.37-50 Ningrum, R. (2014). Refleksi Prinsip-Prinsip Keuangan Publik Islam Sebagai Kerangka Perumusan Kebijakan Fiskal Negara. El Wasathiya: Jurnal Studi Agama, 2(1), 86–103. Razali, R., & Febriansyah, S. (n.d.). Eksistensi Keadilan Sosial Dalam Keuangan Publik Islam, Ramadhan Razali. 40–56. Rejeki, D. P. S. (2006). ANALISIS PENANGGULANGAN KEMISKINAN MELALUI IMPLEMENTASI PROGRAM P2KP DI KOTA SEMARANG ANALISIS PENANGGULANGAN KEMISKINAN MELALUI IMPLEMENTASI PROGRAM P2KP DI KOTA SEMARANG. https://creativecommons.org/licenses/by/4.0/