Parliament passes Zakat Bill, assigns MMA as fund custodian
The bill sets out provisions for the administration, collection, receipt and distribution of zakat funds in Maldives under a clear legal structure.
Parliament on Wednesday passed the Zakat Bill, allowing the Zakat Fund to be invested and managed by the Maldives Monetary Authority (MMA).
The bill, formally titled the Zakat Act, was first introduced in August. Its stated objective is to improve the efficiency of the Zakat Fund and establish a legal framework that permits the fund to be invested in a manner consistent with Islamic Shariah.
The bill sets out provisions for the administration, collection, receipt and distribution of zakat funds in Maldives under a clear legal structure.
The Parliamentary Social Committee, which reviewed the bill, proposed two amendments.
The first amendment revises the original proposal to create a dedicated “Zakat Fund” for managing and disbursing zakat contributions. The committee specified that the Zakat Fund must be maintained in a separate account at the MMA, distinct from the public account, as determined by the Ministry of Finance.
The second amendment adds a new article establishing the MMA as the custodian of the Zakat Fund. Under the provision:
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The MMA will serve as the custodian of the Zakat Fund
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The custodian will be responsible for opening and maintaining all accounts related to the Fund and preparing inflow and outflow reports as determined by Zakat House
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A formal agreement must be signed between Zakat House and the MMA for the transfer of custodianship
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The Act allows for the possibility of fees for custodian services
The purpose of the amendment is to ensure that the Zakat Fund is managed separately from the state’s public accounts.
With these amendments, the bill was endorsed unanimously by the committee before being passed in Parliament with 63 votes in favour and none against.
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The Act will come into force next month
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A Zakat Council must be established within two months of its commencement
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A five-member Sharia Advisory Committee must be appointed to advise on Shariah compliance in zakat administration
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Violations of laws or regulations related to zakat collection, distribution or investment will carry fines ranging from MVR 1,000 to MVR 100,000
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Obtaining zakat funds through false information will constitute a criminal offence
