Fiscal Decentralization and Islamic Economics; Some Theoretical Considerations on Taxation and Budget Allocation

Taxation and allocation of the budget for providing public goods is the responsibility of governments. Governments according to their administrative and decision-making structures, trying to perform this task. Public choice theory, by focuses on public decision-making and government failure, consider fiscal federalism as a solution. The main goal of this paper is to examine the Islamic economics counter to this proposal. In order to achieve this goal, topics such as similarities between natures of khums, zakat and conventional tax and Islamic evidence of regional budget expenditure has been mentioned. Finally, by assuming certain considerations, according to Islamic point of view, there is no obstacle to implementation of some level of fiscal federalism in the state.