Ambiguities In Sindh Workers Welfare Fund (WWF) Act 2014
The Sindh government has been requested to remove ambiguities and flaws from the Sindh Workers Welfare Fund (WWF) Act 2014.
In order to achieve this, the General Secretary of the workers’ association has taken up the matter with the Sindh Labour Secretary. The sought clarifications include various constitutional and computational issues that have arisen since the enactment of the 2014 Act.
According to the Sindh WWF Act, every industrial establishment located in the province is required to pay a certain amount to the WWF. The term ‘located in Sindh’ itself has not been elaborated which has created issues related to computing of the WWF.
Clarification has also been sought on where an industrial establishment has a registered or if the principal office is in Sindh with a factory, outlet or branch in other provinces, how will such a company compute and pay WWF in Sindh on profit attributable to places of business located in Sindh.
Similarly, in case of banks with branches located all over the country, either registered or having principal office located in the province of Sindh or outside Sindh, how will such banks compute and pay WWF on profit attributable to branches located in the province of Sindh?
Moreover, the Association also sought clarification on the apportionment of profits between the places of business located in Sindh and those located in other provinces.
The Association asked the provincial government to clarify these different scenarios after consultation with the Federal Board of Revenue, subsequent to which suitable amendments should be made to the Sindh WWF Act 2014.
The issue of exemption from levy of WWF for government-owned industrial establishments has also been raised.
The Association pointed out that according to the Federal WWF Ordinance, any industrial establishment owned by the government or a corporation established by the government or where the government owns the majority of shares in such corporation is exempt from levy of WWF. The term ‘government’ in the Federal WWF Ordinance implies the ‘federal government’.
The Sindh WWF Act has made a similar provision where industrial establishments owned or established by the government is exempt from levy of WWF. However, as per the definition given in Section 2(e) of the Sindh WWF Act, the term ‘government’ means ‘government of Sindh.’
Industrial establishments located in Sindh and owned by the federal government had been enjoying exemption from WWF under the Federal WWF Ordinance even before the enactment of the Sindh WWF Act 2014. However, through a strict interpretation of the Sindh WWF Act 2014, industrial establishments owned by the federal government cannot avail such exemption as the definition of the ‘government’ in the 2014 Act does not include ‘federal government.’
The Sindh government has been urged to make suitable amendments to the 2014 Act so that industrial establishments owned by the government are exempt from WWF as they are entitled to under the Federal WWF Ordinance.