ISLAMABAD: The Council of Common Interests (CCI) will take up the matter of distribution of the "Workers Welfare Fund (WWF)" among the provinces.
Sources told the Business Recorder here on Thursday that the Section 4 of the Workers Welfare Fund Ordinance, 1971 has authorised the taxation officers of the Federal Board of Revenue (FBR) to collect, recover and assess the WWF.
Under Section 4 of the Workers Welfare Fund Ordinance, 1971, the assessment of the WWF would be done by the income tax officers.
Under Section 60(a) of the Income Tax Ordinance, 2001, a person shall be entitled to a deductible allowance for the amount of any WWF paid by the person in tax year under Workers Welfare Fund Ordinance, 1971.
Therefore, there is no wrong in collection of the WWF by the taxation officers of the FBR.
Traditionally, the budget documents always show the WWF as part of the direct taxes collection of the FBR.
The powers of the collection of the WWF by the taxation officers still remain intact under the Workers Welfare Fund Ordinance, 1971.
When asked, the Supreme Court of Pakistan has held that the WWF contributions/payments do not constitute a tax; officials said that the SC judgment has not abolished the said tax.
The court has declared increase in its rate from two to four percent as illegal. However, the SC has not taken away the right of the FBR for collection of the WWF under the Workers Welfare Fund Ordinance, 1971, the FBR official added.
According to the sources, earlier the amount of the WWF was transferred to the Ministry of Labour.
The subject of "welfare of labour" was devolved to the provinces under the 18th Constitutional Amendment Act of 2010.
Sindh and Punjab have already legislated their respective WWF laws.
The FBR is collecting the WWF on behalf of other provinces and transfer the amount to them.
Even if any company of Sindh and Punjab deposits the WWF with the FBR, the amount is transferred to the provinces.
However, the matter of the distribution of the WWF would be decided by the CCI.
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