The Impact of Tax Evasion on National Economic Stability From an Islamic Economic Perspective

Abstract

Purpose: This study aims to analyze the impact of tax evasion practices on Indonesia’s national economic stability and to examine this phenomenon from the perspective of Islamic economics, particularly in terms of justice, the public interest, and social responsibility in state financing.

Method: This study employs a qualitative method with a normative approach. The analytical tool used is qualitative descriptive analysis through the systematic review and interpretation of documents. The study population includes all academic literature, tax regulations, and publications related to tax avoidance and national economic stability. The sample was selected using purposive sampling based on topic relevance, year of publication, and the alignment of the content with the research objectives.

Finding: Research findings indicate that tax avoidance practices in Indonesia are carried out through various strategies, such as transfer pricing and thin capitalization, which exploit loopholes in tax regulations. These practices result in a decline in government revenue, a narrowing of the government’s fiscal space, and have the potential to disrupt national economic stability. From an Islamic economic perspective, tax avoidance is considered contrary to the principles of justice and the public interest because it reduces contributions toward funding public interests and creates injustice in the distribution of the fiscal burden among the public.

Novelty: The novelty of this study lies in its integration of an analysis of the impact of tax avoidance on national economic stability with an Islamic economic approach. Unlike previous studies, which generally focused on taxation or corporate performance, this study links tax avoidance to indicators of macroeconomic stability while evaluating it based on the principles of justice (al-'adl), public interest (maslahah), and trust (amanah) in Islamic economics, thereby providing a more comprehensive perspective on the fiscal and moral implications of tax avoidance practices.