Fiscal Policy in Islamic Economics

Fiscal Policy in Islamic Economics - Fiscal policy is the policy of the Government to spend its revenues taken in realizing the economic goals. Fiscal policy and has two instruments, first: the policy of income, which is reflected in tax policy, second: policy shopping. The second instrument is reflected in the budget of the State. Fiscal policy is part of a country's economic policies which cannot stand on its own in the achievement of economic objectives; other important policy is monetary policy.

Fiscal policy will greatly depend on these two instruments, namely the income and expenditure. Fiscal policy's performance from one country to another country would be very different. Inequality based on economic growth to be achieved and economic philosophy embraced. In the highest economic community for example, fiscal policy is usually aimed at how to achieve rapid economic growth, investment and maintaining the balance of the price to be a top priority. While in an advanced capitalist economy society usually focused on fiscal policy will be the attainment and economic stability as well as the utilization or full employment opportunities.

The Islamic principles of fiscal policy and budget intends to develop a society based on the distribution of wealth was balanced with material values and spiritual at the same level (Mannan, 1997, 230). According To R. W. Lindson. "In making government expenditure, government revenue, in obtaining a determination of the type, timing and procedures to be followed." Fiscal policy is considered as a tool to organize and oversee human behavior can be influenced through incentives or negates the incentives provided by increasing government revenue (through taxation, loan, or guarantee against government spending). In theory, of course tax system that is used by modern secular countries proposed that based on the social-political theory and with the goal of maximum profit the general welfare of the people.