The paper focuses on the significant role of Zakat in the Islamic economic system and how it can be effective in solving various economic issues, particularly poverty eradication. The priority of Islamic Sharia is to ensure everyone has a dignified life by using Zakat funds to their fullest potential. The key aspects discussed are defining Zakat, its conditions, and its economic impact, as well as addressing economic problems like recession, inflation, and unemployment. The objective of the study is to transform these economic challenges into positive aspects that contribute to economic development and foster a robust Islamic society with a minimal presence of poverty and unemployment. Zakat's significance lies in its contribution to achieving economic equilibrium, just wealth distribution, and enhancing the overall welfare of society. The effective collection and distribution of Zakat funds for investment projects stimulates consumption, boosts production, generates employment, and balances societal aspects, particularly in the economic realm. The study's problem statement focuses on comprehending the importance of Zakat in Islamic economics and its role in fostering a highly efficient economy. The aim is to clarify the nature of Zakat, its obligatory status in Islam, its effect on demand and consumption, and its contribution to solving economic issues and ensuring equitable economic development. The study's value lies in pointing out the importance of Zakat in the creation of a prosperous and successful economy. By redistributing wealth in a fair way, eliminating poverty and unemployment, and providing everyone with a dignified life, we can foster growth and progress within a solid foundation. The study's methodology is based on a descriptive-analytical approach that relies on religious sources (Quran and Hadith) in addition to the previous studies to emphasize Zakat's importance and its role in achieving effective economic development within an Islamic framework.

Zakat, Poverty, Investment, Islamic Economy, Poverty, Economy, Zakat Function