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WORKERS' WELFARE FUND (WWF)

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THE WORKERS’ WELFARE FUND ORDINANCE, 1971 (XXXVI OF 1971)

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FOLLOWING WWF AMENDMENTS MADE BY THE FINANCE ACTS 2006 & 2008. WWF ORDINANCE MAY BE REPRODUCED AFTER INCORPORATING THESE AMENDMENTS:

FINANCE ACT 2006 (III OF 2006) DATED 01.07.2006:

12. Amendment of Ordinance, 1971 (XXXVI of 1971).–In the Workers’ Welfare Fund Ordinance, 1971 (XXXVI of 1971), the following further amendments shall be made, namely,–

(1) for the words “Income-Tax Officer”, wherever occurring the words, “Taxation Officer” shall be substituted;

(2) in section 2,–

(a) in clause (b),–

(i) for the figure, “1969”, the figure “2002” shall be substituted; and

(ii) in the margin, for figures and words “XXIII of 1969” the figures and words “XCI of 2002” shall be substituted;

(b)  clause (e) shall be omitted;

(c) in clause (f), for sub-clause (iii), the following shall be substituted, namely.–

“(iii) any concern running a public transport service”;

(d) in clause (ff),

(i) for the figures “1979”, the figures “2001” shall be substituted; and

(ii) in the margin, for the figures and word “XXXI of 1979”, the figures and words “XLIX of 2001” shall be substituted;

(e) after clause (h) a new clause shall be inserted namely:–

“(ha) “Taxation Officer” means a person appointed to be a Taxation Officer under the Ordinance and includes a Commissioner as defined in clause (13)A of section 2 of the Ordinance;

(f) for clause (i) the following shall be substituted, namely.–

“total Income” means:

(i) where Return of Income is required to be filed under this Ordinance, the profit (before taxation or provision for taxation) as per accounts or the declared income as per the return of income, whichever is higher; and

(ii) where return of Income is not required to be filed, the profit (before taxation or provision for taxation) as per accounts or four per cent of the receipt as per the statement filed under section 115 of the Ordinance, whichever is higher.”;

(g) in clause (j),

(i) for the figures “1969”, the figures “2002” shall be substituted; and

(ii) in the margin, for the figures and word “XXIII of 1969”, the figures and words “XCI of 2002” shall be substituted;

(3) in section 4,

(a) in sub-section (1), for the word “one” the word “five” shall be substituted, and the words, “or would have been so assessable but for the exemption made by section 48 thereof”, shall be omitted; and

(b) for sub-section (3) following shall be substituted namely:–

“(3) The industrial establishment shall on or before the date prescribed for filing of returns of income or a statement under the relevant provision of the Ordinance, pay the amount due from it under sub-section (1) and furnish the proof of payment to the Taxation Officer or the Commissioner as the case may be”;

(c) in sub-section (8) for the words, “equal to eighty per cent per annum of the amount due from it from the date on which it was originally payable to the date on which it is paid”, the words “as per provisions of the Ordinance, relating to the mode and time of recovery of the income tax.” shall be substituted;

(d) after sub-section (9) a new sub-section shall be inserted namely:–

“(10) Industrial establishment may file an appeal against any order passed by Taxation Officer or the Commissioner as the case may be under this Ordinance before the Commissioner (Appeal) appointed under the Ordinance”;

(4) in section 6, for clause (e), following shall be substituted, namely.–

“(e) investment in government, government guarantees, non-government securities and Real Estate”;

(5) in section 10,

(a) for clause (c), following shall be substituted, namely.–

“(c) investment in government, government guarantees, non-government securities and real estate;”; and

(b) after clause (c), a new clause shall be added, namely.–

“(ca) to dispose of the moveable and immoveable property of Workers Welfare Fund and Workers Welfare Boards;”;

(6) in the said Ordinance, after section 15 the following new section shall be added, namely,–

16. Exemption from taxes.–Notwithstanding anything contained in any other law, the Federal Government may, by order in writing, exempt the Institution from any tax, duty, or rate leviable by the Federal Government or by a local authority under the control of the Federal Government.”

FINANCE ACT 2008 (I OF 2008) DATED 27.06.2008:

8. Amendments of Ordinance No. XXXVI of 1971.—In the Workers Welfare Fund Ordinance, 1971 (XXXVI of 1971), the following further amendments shall be made, namely:–

(1) in section 2, in clause (f) after sub-clause (iv), the following new sub-clause shall be inserted, namely.—

“(iva) any establishment, to which the West Pakistan Shops and Establishment Ordinance, 1969 (W.P. Ordinance No.VIII of 1969), for the time being applies;”;

(2) in section 4,–

(a) in sub-section (1), the words “of so much” and “as is assessable under the Ordinance” shall be omitted;

(b) in sub-section (4) the words and comma “At the time of making an assessment under the Ordinance, or as soon thereafter as may be the” and “on the basis of the income so assessed” shall be omitted; and

(c) in sub-section (5) for the word “assessed” the word “total” shall be substituted and the words “subsequent to the assessment made under the Ordinance” shall be omitted; and

(3) in section 11B, in sub-section (3) after the word “sanction” at the end the words “with the previous approval of the Governing Body” shall be added.

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CASE STUDIES

WORKERS WELFARE FUND: TAXING THE MUTUAL FUNDS

WORKERS WELFARE FUND (WWF)

Mutual Funds and Pension Funds became a subject to WWF levy that is levied under West Pakistan Shops and Establishments Ordinance 1969 and Workers Welfare Ordinance, 1971 (Ordinance) by virtue of amendments in the law made by Finance Act, 2008. This matter is being actively pursued for resolution at Sind High Court on petition filed by certain AMC’s for a court decision on the basis of clarifications issued by the Ministry, so that consequent amendments to the law can be requested, which will restore mutual funds and pensions funds to the position prior to the amendment in the Workers Welfare Fund Ordinance, 1971 made through Finance Act, 2008.

NOT PROVISIONING FOR WWF MAY CAUSE CAPITAL EROSION

WORKERS WELFARE FUND AMENDMENT STRUCK DOWN

WORKERS WELFARE FUND: DOES NOT IMPACT MUTUAL FUNDS

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