ISLAMABAD: The Federal Board of Revenue (FBR) has admitted that the matters regarding Workers Welfare Fund (WWF) and Workers’ Profit Participation Fund (WPPF) have been devolved to the provinces following 18th constitutional amendment.
According to the FBR’s income tax circular number 2 of 2021, after the 18th constitutional amendment, the matters regarding the WWF and the WPPF have been devolved to the provinces.
Provinces have promulgated their own workers welfare fund and workers profit participation fund laws. The statutory contributions made by businesses to these funds under federal laws are deductible allowances.
However, the contributions made under provincial laws were inadmissible expenses. Now contributions made to provinces have made deductible allowances. Necessary changes have been made in sections 60A and 60B of the Ordinance.
However, in case of trans-provincial organisations, the admissibility of these allowances shall be subject to payment to the federal government, which follows the apex court judgment on the subject, the FBR added.
Copyright Business Recorder, 2021