FBR collects Rs11.854bn under head of Workers’ Welfare Fund in 2023-24

ISLAMABAD: The Federal Board of Revenue (FBR) has collected Rs 11.854 billion under the head of Worker’s Welfare Fund/Worker’s Profit Participatory Fund in 2023-24 as compared to Rs 10.105 billion, reflecting an increase of 17.3 percent.

The FBR’s data revealed that the Capital Value Tax collection amounted to Rs 56.108 billion in 2023-24 as compared to Rs 50.346 billion in 2022-23, showing an increase of 11.4 percent.

According to the FBR’s data, total collection under other heads of the direct taxes totalled at Rs 67.962 billion during 2023-24 against Rs 60.451 billion, reflecting an increase of 12.4 percent.

In January 2023, FBR has already segregated the Workers Welfare Fund (WWF) from other taxes being collected by the board.

Last year, the FBR had issued a clarification on the directions of the Federal Tax Ombudsman (FTO):

(I) Record of all refunds of WWF and WWPF need to be separately maintained by IR field formations. While furnishing final MPR for the month of June of each FY, IR field formations must reflect the overall refund amount of WWF, if any, paid by them during the year.

ii) This overall amount of refund of WWF communicated IR field formations must be separately summed up by Secretary Revenue Budget, IR, FBR.

(iii) The aforesaid accumulative amount of refunds of a non tax levy/WWF paid from revenue collection need to be adjusted at the time of final yearly adjustment of Federal Accounts.

(iv) In a decisions this office (FTO) has already held that any liability of WWF cannot be adjusted against determined tax refund because only inter-tax/intra tax adjustment is covered under the law. FBR’s letter dated March 2, 2022 also holds the same view.

(v) Refund order u/s 170(4) of Income Tax Ordinance, 2001 covers only issuance of Tax refunds.

Apparently refund of any non-tax levy is not covered under the said section. If any such refund is to be issued than the order will have to be passed u/s 4(6) of WWF Ordinance 1971. It was clarified by the FBR that WWF is collected by the officers of Inland Revenue from the Industrial Establishments at two percent whose total income is not less than five lac rupees. The mode of payment and recovery from industrial undertaking is mentioned in Section 4 of the WWF before ordinance 1971. The said amount is paid by the Industrial Establishment on or before the date prescribed for filing of return and proof of payment is furnished to the concerned officer, if the officer does not agree with the working of the industrial establishment, shall pass an order by taking into account the amount paid by before the date specified in the order.

Similarly, the excess amount shall be refunded by the concerned officer to the Industrial Establishment. The amount of tax and WWF should be bifurcated that is refundable should be refunded from the WWF account only, FTO added.

Copyright Business Recorder, 2024