The Other Side of Zakat in Poverty Reduction: A Phenomenology Study Arif Widyatama STIE Panca Bhakti Palu arifwidyatama10@gmail.com Andi Sabirin Baso STIE Panca Bhakti Palu andisabirin1@gmail.com Fathiatul Haq STIE Panca Bhakti Palu Btnsasa@gmail.com Abstract This study aims to understand the phenomenon of zakat given to Mustahiq. The Mustahiq uses the zakat to increase income through business development so that it can reduce poverty. The research method used is qualitative using a phenomenology approach. This study interviewed three informants who received zakat. The results of this study reveal that zakat has a different spiritual value from taxes. When zakat is distibuted, it can increase the income of the grantees. BAZNAS management sys- tem must be carried out in a professional, transparent and accountable manner and aims at eradicating poverty and unemployment in Palu with a cultural approach based on faith. Besides, it helps the poor in community. One of the goals is to create some of muzakki and awareness of helping each other. Keywords: Zakat, Tax, Poverty, Phenomenology, Spiritual. INTRODUCTION The purpose of this study is to understand the phenomenon of zakat given to Mustahiq. Mustahiq uses zakat to increase income through business development so as to reduce poverty. The Indonesian economic growth in 2019 decreased compared to that in 2018. The level of the Indonesian economic growth in 2018 was 5.17, but in 2019 it was reduced to 5.09 (Badan Pusat Statistik, 2020). The growth did not strongly affect economic fundamentals 77 IQTISHADIA Vol. 13 (1) 2020 PP. 77 - 94 P-ISSN: 1979 - 0724 E-ISSN: 2502 - 3993 DOI : 10.21043/iqtishadia.v13i1.5993 IQTISHADIA 13,1