UAE: New zakat draft law approved; up to Dh1 million fine, jail for illegal collection
Entities currently engaged in zakat activities must regularise their status within one year of the law’s enactment
A new draft federal law regulating the collection, distribution, and management of zakat in the UAE was passed by the Federal National Council (FNC) on Tuesday. The law introduces strict penalties for violations, including fines of up to Dh1 million and imprisonment, as part of wider efforts to enhance transparency, accountability, and governance over zakat funds.
The new legislation marks a significant step in developing a comprehensive system to regulate zakat activities across the country, said Dr Omar Habtoor Al Darei, Chairman of the General Authority for Islamic Affairs, Endowments, and Zakat. It enhances governance, ensures zakat reaches eligible recipients efficiently, and encourages broader community participation, ensuring that “zakat money is distributed to its rightful beneficiaries under the highest levels of transparency and accountability and reinforces the public’s confidence in zakat institutions and promotes social solidarity in the UAE,” he added.
The draft legislation governs all processes related to receiving, collecting, distributing, and disbursing zakat, including the investment of surplus funds, in line with Sharia rulings and national regulations.
It applies to all individuals and entities engaged in zakat activities within the UAE, including those operating in financial and non-financial free zones. However, the Cabinet may exempt certain organisations from parts of the law, provided they comply with registration and reporting requirements.
The law introduces strict penalties for violations involving zakat funds. Crimes against zakat will be treated as crimes against public funds. Individuals found collecting, receiving, or distributing zakat in violation of the law may face imprisonment, fines up to Dh1 million, or both. They will also be required to return any funds unlawfully collected.
Authorised entities risk fines between Dh100,000 and Dh1 million for distributing zakat abroad without a permit or in violation of approved regulations, investing surplus funds without a licence or breaching conditions, and deducting zakat funds without authorisation or using deductions improperly, as well as disclosing platform data without legitimate reason.
Additionally, anyone who obtains zakat funds through false or forged documents, knowing them to be inaccurate, may be punished with imprisonment of up to one year, fines of up to Dh200,000, or both. Entities currently engaged in zakat activities must regularise their status within one year of the law’s enactment. The Cabinet may extend this deadline upon recommendation from the Chairman of the Authority.
A significant feature of the new law is the creation of a unified digital platform, the ‘National Zakat Platform’, which will record all authorised entities, eligible beneficiaries, fund allocations, and collected and distributed zakat. This platform aims to ensure transparent and efficient management of zakat funds.
The law prohibits distributing zakat outside the UAE, except in exceptional cases such as natural disasters or major humanitarian crises. In such instances, authorised entities must submit a request through the National Zakat Platform and coordinate with UAE authorities to ensure compliance with applicable regulations.
Additionally, the law says authorised entities may invest surplus zakat funds, but only with the approval of the competent authority and under strict conditions; evidence must show there is surplus zakat with no eligible recipients within the UAE, investments must comply with Sharia rulings, avoid risk, and maintain the religious integrity of zakat. And Profits from these investments must be fully allocated to zakat purposes, with all transactions documented on the National Zakat Platform. Entities are prohibited from deducting any portion of these investment profits for themselves or for the authority supervising them.
During the session, FNC members debated extensively over Article 4 of the law, which specifies who is entitled to collect or receive zakat. As originally drafted, the article stated:
- It is prohibited for a regular person to collect or receive zakat.
- An exception is made for regular people linked to eligible categories of zakat recipients, who may receive zakat on their behalf, provided the collection and distribution comply with regulations set by the Chairman of the Authority in coordination with competent authorities.
- It is prohibited for any person — regular or legal — to collect or distribute zakat without obtaining the required licence.
However, before Tuesday’s session, an FNC committee reviewing the draft proposed several amendments to Article 4 as follows:
- It is prohibited for a regular person to collect or receive zakat for distribution except according to regulations and conditions issued by the chairman of the authority in coordination with the concerned authorities.
- Delete Item 2.
- Prohibiting any person from receiving, collecting or distributing zakat without a licence.
Some members argued the amendments placed unnecessary hurdles on benefactors and beneficiaries, particularly those who traditionally give zakat directly to relatives or acquaintances in need.
“This money is collected for poor people,” said member Maryam Bin Theneya. “It is unfair to place such a burden on them to receive it. Many of them wait all year for this aid.” Other members raised concerns about the risk of penalising needy individuals for accepting zakat without formal procedures. “If a poor person receives zakat money, does that mean if he accepts it he violated the law?” questioned Saeed Al Aabdi.
After lengthy deliberation, the council opted to reject the amendment proposed by the council’s committee and upheld the government’s clause, opting instead to retain more flexibility in the traditional giving of zakat.
Source: Khaleejtimes
