Integration of Maqashid Syariah Principles, Green Banking, and Tax Policy in Realizing Sustainable Finance in Indonesia

Suhendar, Rudi Zulfikar, Elvin Bastian and Imam Abu Hanifah
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Suhendar: Sultan Ageng Tirtayasa University, Indonesia
Rudi Zulfikar: Sultan Ageng Tirtayasa University, Indonesia
Elvin Bastian: Sultan Ageng Tirtayasa University, Indonesia
Imam Abu Hanifah: Sultan Ageng Tirtayasa University, Indonesia

Oblik i finansi, 2026, issue 2, 178-191

Abstract: In response to escalating environmental degradation, climate change, and socio-economic inequality, there is a growing urgency to integrate ethical, environmental, and fiscal considerations into Indonesia's financial system. As the world's largest Muslim-majority country and a country with significant environmental challenges, Indonesia requires a sustainable finance model that is not only technically effective but also normatively grounded. In this context, maqashid syariah offers a comprehensive ethical foundation, while green banking and tax policy function as operational and fiscal instruments. This research aims to analyze and construct an integrative framework linking maqashid syariah principles, green banking practices, and tax policy as mutually reinforcing pillars for realizing sustainable finance in Indonesia. This study employs a qualitative research design using a systematic literature review, documentary analysis, and thematic synthesis. Data are derived from academic publications, regulatory documents, and international sustainability frameworks, which are analyzed through qualitative content analysis to identify patterns, relationships, and conceptual linkages among the three domains. Based on this approach, the study develops a conceptual model termed the Sharia-Based Sustainable Finance Framework. The findings reveal that the current implementation of sustainable finance in Indonesia is constrained by institutional fragmentation, lack of coordination among regulatory bodies, absence of a unified green taxonomy, and insufficient fiscal incentives. The study demonstrates that maqashid syariah can serve as a strong normative foundation that mandates environmental responsibility, green banking provides measurable operational mechanisms, and tax policy acts as a fiscal accelerator that makes sustainable investment economically viable. Effective synergy among these pillars requires inter-agency coordination, integrated regulatory design, and a comprehensive fiscal incentive structure aligned with Islamic green finance instruments. This research contributes to the literature by offering a novel integrative perspective that bridges Islamic finance, environmental sustainability, and fiscal policy within a unified analytical framework. It also provides practical policy recommendations for regulators, Islamic financial institutions, and government authorities to accelerate Indonesia's transition toward a sustainable, ethical, and resilient financial system.

Keywords: Maqashid Syariah; green banking; sustainable finance; fiscal policy; Islamic finance; environmental sustainability; green finance (search for similar items in EconPapers)
JEL-codes: G20 H21 O33 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:iaf:journl:y:2026:i:2:p:178-191

DOI: 10.33146/2518-1181-2026-2(112)-178-191

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