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Introduction: Islamic economy holds significant potential to support economic growth in developing countries. However, limited fiscal incentives and unintegrated tax policies hinder its optimal contribution to national development.

Methods: This study employs descriptive analysis using secondary data from the Financial Services Authority (OJK), global Islamic economy reports, and taxation policies in Indonesia and other developing nations. The objective is to assess the alignment between tax strategies and Islamic economic development.

Results: Indonesia’s Islamic banking market share remains at 7.3%, with financing concentrated in trade and consumption. The VAT increase to 12% and the adoption of a digital tax administration system aim to boost revenue. However, insufficient tax incentives for halal SMEs and exporters constrain the sector’s global competitiveness.

Discussion: Integrating Islamic finance with inclusive tax reform—such as tax exemptions for exporting halal SMEs, the development of Islamic green sukuk, and the digitalization of zakat and waqf—could strengthen economic resilience and sectoral productivity.

Conclusion: Adaptive and transparent tax policy aligned with Islamic economic growth strategies is vital for achieving sustainable economic progress in developing nations.

Novelty: This research highlights the strategic integration of taxation and Islamic economic development as a key driver of inclusive growth in the digital era.

Introduction: The rapid development of the global economy has led to the emergence of various financial institutions in Indonesia, both banking and non-banking. This progress has raised concerns among the Muslim community regarding the compliance of these institutions with Islamic principles, prompting the establishment of Sharia-based financial institutions. However, the accounting practices of these institutions have often mirrored those of conventional finance, leading to demands for a distinctive Sharia-compliant accounting system.

Methods: This study employs a qualitative research method through a literature review approach. The data were collected from scholarly books, academic journals, and relevant publications focusing on Islamic accounting and insurance practices in Indonesia.

Results: The findings indicate that Sharia accounting is a system of recording, classifying, summarizing, and reporting financial transactions over a specific period in accordance with Islamic law. In the context of Islamic insurance (takaful), the accounting treatment is guided by the principles of fairness, transparency, and mutual cooperation.

Discussion: Islamic insurance institutions differ from their conventional counterparts in terms of operational principles and risk-sharing mechanisms. The application of Sharia accounting ensures that financial reporting adheres to Islamic ethical standards. The study highlights the need for proper implementation of Sharia accounting frameworks tailored to Islamic insurance to maintain religious and financial accountability.

Conclusion: Sharia accounting systems play a crucial role in legitimizing Islamic insurance practices in Indonesia. The integration of Islamic principles into accounting practices ensures not only compliance but also builds public trust in Islamic financial institutions.

Novelty: This study contributes to the growing literature on Islamic financial systems by specifically examining the application of Sharia accounting in the insurance sector, an area that remains underexplored in the Indonesian context.