Digital Fiscal Governance in Islamic Economies: The Convergence of Zakat, Taxation, and Emerging Financial Technologies

Abstract

This study examined the issue of digital fiscal governance in Islamic economies by investigating the convergence of zakat and taxation and new financial technologies. The study design was quantitative, cross-sectional, and explanatory. The instrument, a questionnaire with a five-point Likert scale, was used. A purposive sample of 300 respondents who have knowledge/experience in the fields of taxation, zakat, Islamic finance, digital financial services, or FinTech was selected. Digital Zakat Integration, Digital Taxation, Blockchain-Enabled Tracking of Transparency, and AI-Enabled Financial Analytics were the independent variables, while Digital Fiscal Governance was the dependent variable. SPSS was used for descriptive statistics, Cronbach's alpha to check for internal consistency, Pearson correlation, and multiple regression. The results indicated that Digital Fiscal Governance had the highest mean (M = 3.95, SD = 0.69), followed by Digital Zakat Integration (M = 3.91, SD = 0.71), and AI-Driven Financial Analytics (M = 3.88, SD = 0.73). The internal consistency of all constructs was high, ranging from 0.85 to 0.92 on Cronbach's alpha level. Digital Zakat Integration was the most highly correlated with Digital Fiscal Governance (r = 0.68, p < 0.01). The regression model was statistically significant (R = 0.784, R² = 0.614, F = 117.31, p < 0.001) and explained 61.4% of the variance. Digital Fiscal Governance was significantly predicted by Digital Zakat Integration (β = 0.31, p < 0.001), Digital Taxation (β = 0.28, p < 0.001), Blockchain-Enabled Transparency (β = 0.22, p < 0.01), and AI-Driven Financial Analytics (β = 0.19, p < 0.01). The results validate integrated and transparent digital fiscal systems with accountability and Sharia-compliant systems.

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