<![CDATA[This study examines the dynamic relationship between zakat, tax revenue, and key macroeconomic and social indicators in Aceh Province, Indonesia. As a region with special autonomy and a predominantly Muslim population, Aceh presents a unique fiscal setting in which zakat plays an important redistributive role alongside the formal tax system. This study employs balanced panel data from 23 districts/cities over the period 2020–2024 and applies a Panel Vector Error Correction Model (Panel VECM) to capture both short-run dynamics and long-run equilibrium relationships among zakat, tax revenue, economic growth, poverty, unemployment, and income inequality. The results of the cointegration test confirm the existence of a long-run equilibrium relationship among the variables. The VECM estimation reveals that, in the long run, zakat has a negative and significant relationship with tax revenue and economic growth, while showing a positive relationship with poverty, unemployment, and income inequality. In the short run, shocks to zakat generate temporary responses across fiscal and macroeconomic variables. The Impulse Response Function (IRF) analysis shows that zakat shocks initially increase tax revenue before gradually converging to equilibrium. Meanwhile, zakat contributes to reducing income inequality. Variance Decomposition results indicate that zakat explains a larger proportion of inequality fluctuations than other variables, emphasizing its role as a redistributive policy instrument.]]>
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