KTBA identifies lacunae in Sindh workers welfare fund laws

KARACHI: Karachi Tax Bar Association (KTBA) has identified lacunae in recently promulgated workers welfare fund (WWF) Act by the Sindh government and said that corporate entities having operations across the country will face difficulties in paying the levy.

In a communication with Labour secretary, the Karachi Tax Bar Association said certain issues have been surfaced after the promulgation of Sindh Workers Welfare Fund Act, 2014. Prior to the provincial law, the Federal Board of Revenue (FBR) was entitled to collect workers welfare fund from corporate entities, which continued till 2016.

The tax bar said under the WWF Act, every industrial unit located in the province is required to pay the levy. The bar also sought clarification regarding computation of WWF in cases where a company had registered office in other provinces, but has branches or factory in Sindh.

The tax bar advised the provincial government to issue a clarification after consultation with the FBR and made appropriate amendments to the act. Under the federal WWF laws, all the industrial units owned by governments were exempted from the levy, but in the provincial law, it allows exemption to only Sindh-owned industrial units, it added.

The tax bar suggested amendments to grant exemption to industrial establishments owned by the federal government. The Karachi Tax Bar Association also raised issues regarding Sindh Companies Profit (Workers’ Participation) Act, 2015 and said the provincial law required a company, which is registered in Sindh, but having branches in other provinces, to pay the levy from all its operations.

However, workers of such a company working in Sindh will only be entitled to have allocation from the fund. The tax bar recommended that a procedure should be laid down in consultation with the federal and other provincial authorities to avoid potential future disputes.