<![CDATA[Islamic fiscal policy offers an alternative approach grounded in Sharia principles for managing state revenues and expenditures, with the overarching goal of achieving social welfare (maslahah) and distributive justice. This study aims to analyze the theoretical foundations of Islamic fiscal policy, identify its primary instruments-including zakat, waqf, jizyah, kharaj, and 'ushr and examine their relevance and implementation challenges within the context of Indonesia's national economy and the contemporary global financial system. A systematic literature review method combined with descriptivequalitative analysis was applied to primary classical texts, government regulations, international institution reports, and indexed scientific articles published between 2014 and 2024. Findings indicate that Islamic fiscal instruments hold significant potential for reducing income distribution inequality, promoting inclusive growth, and strengthening state fiscal resilience. However, implementation faces several structural challenges, including: weak institutional capacity for zakat collection and management, insufficient regulatory integration of Islamic fiscal instruments into the state budget (APBN) framework, and low public literacy regarding Sharia-based fiscal obligations. This study recommends gradual integration of Islamic fiscal instruments through strengthened regulation, institutional reform of the National Zakat Board (BAZNAS), and harmonization with conventional fiscal systems as a strategic pathway toward equitable economic development.]]>
