Sindh expects to collect Rs5bln in workers’ welfare levy

KARACHI: Sindh Revenue Board (SRB) is expected to collect five billion rupees in an outstanding workers’ welfare levy from the corporate sector by the end of March according to a court’s ruling last month, tax officials said on Saturday.

The officials said the provincial department is likely to get the pending workers participation profit fund (WPPF) from the firms in the province’s jurisdictions, in light of a court’s order, when they would file their returns.

A SRB official said the provincial revenue board has already issued notices to the companies, their lawyers and tax bars to deposit the amount.

“Corporate entities would deposit WPPF in the monthly statement for the month of February 2018, which will be filed this month,” the official added.

The official said the Sindh High Court (SHC), in its judgment in February, allowed the provincial tax authority to collect WPPF from corporate and industrial establishments.

Before the 18th Amendment into the constitution in 2010, the Federal Board of Revenue (FBR) had the legal power to collect WPPF from across the country. After the amendment, the powers were, however, delegated to the provinces and presently the provincial governments are allowed to collect WPPF.

Sindh is the first province to introduce a legislation to collect WPPF and get the Act of 2015 enacted.

Sindh WPPF Act 2015 applies to all the companies in the province regardless of where their registered office or industrial premises are located. So, if a company’s registered office is in Lahore and its manufacturing premises are in Peshawar but if it has any kind of presence in Sindh the Act 2015 allows the province to collect the levy.

SHC also removed a confusion of applicability of rates under the WPPF. In its order, the court said the purpose of WPPF was the welfare of labour and there were no problems applying it to all the workers of a company throughout Pakistan. It retained this character on the commencement of the present constitution and up to the 18th amendment (from 1973 to 2010).

“The Act thereafter ‘fractured’ into provincial legislation and was then replaced by the Sindh Act,” the court order said.

The Sindh WPPF Act 2015 bounds companies to make a proportionate distribution of 5 percent of their profits to their workers in the province. The five percent of profits will be calculated on the total profits of the company and not just those arising out of its operations from Sindh.

The SRB official said the provincial revenue authority was mandated to collect the amount from corporate and industrial units operating within the jurisdiction of the province or their offices or officers working in any other province or within the jurisdiction of federal government.