KARACHI, May 29: Hundreds of corporates are paying billions of rupees each year to the ministry of labour on account of Workers Profit Participation Fund (WPPF) and Workers Welfare Fund (WWF), which if employed judiciously , would have transformed the life of the working class.

Every company is required by law to distribute five per cent of its net profit to the workers under the WPPF if a worker's salary is Rs3,000 or less. However, if the salary of a worker exceeds Rs3,000, the company is required to deposit his share in the profit to the ministry of labour. As majority of workers in corporations and companies earn way above the ceiling of Rs3,000 the major portion of these funds are passed on to the ministry of labour.

Same is true for most other labour levies. The total impact of levies inclusive of WWF and WPPF on companies comes to around eight per cent of a company's profit. "The ministry is estimated to collect between Rs4 and Rs5 billion under these heads," said a cost accountant on condition of anonymity.

An idea of how much money the government collects from the corporates against WPPF and WWF can be assessed from the following examples. Siemens Corporation pays Rs33 million under WPPF. Aventis Limited (formerly Hoechst) pays Rs12 million under WPPF and Rs1 million under WWF. Dawood Hercules Chemicals pays Rs43 million under WPPF and Rs17 million under WWF. Abbott Laboratories Pakistan Limited pays R44 million under WPPF and Rs16 million under WWF. Hino Pakistan Motors pays Rs29 million under WPPF and Rs11 million towards WWF.

This shows that on an average every big company gives Rs40 million towards WPPF and WWF. This means that in total eight per cent of net profit on the annual basis is being paid by every company towards these levies. How are these funds utilized? And who are the beneficiaries? People have yet to be informed. One thing is for sure these are used for purposes other than workers welfare.

"Such collection of billions of rupees has been going on since 1976," said a senior auditor of a big accounting firm. "Nobody really knows what is the final destination of those billions that go to the account of ministry of labour."

Had the funds been employed for the benefit of workers they would have been living better lives. It could have taken care of education, health and well being of all workers.

"It would be appropriate for the government to inform people as how these funds over the last so many years been utilized," demanded a high ranking officer of a private firm.

Some corporate bosses feel that if allowed they can utilize these levies in a more befitting manner. "Either individually or jointly companies could better employ the funds for the welfare of their workers. The sums of money involved are enormous and is sufficient to construct schools, hospitals and other social welfare projects for the poor workers," they commented.

"We are already trying to fulfil our responsibility as a good corporate citizen towards the welfare of our labourers. But this additional amount could help them a lot," said a chief executive of an MNC.

The social or economic impact of billions of rupees collected by the government on account of different labour levies are not seen anywhere in the country.

According to tax advisors' estimates, around Rs4-5 billion was being collected annually on account of different labour levies from all those companies that employed more than 10 workers.

Tax advisor Syed Shabbar Zaidi suggested that there was a need to amend the labour law and all these labour levies should be merged. Secondly, he said that the entire amount of WPPF and WWF should be left at the disposal of a company.

Mr Zaidi said that once a judicious system of utilization of these funds was evolved it would improve the condition of the labour class. "This will directly help improve industrial efficiency and productivity."

He said the government should consolidate and streamline labour laws with the present system so that a balance was created for improving productivity in the industry. "The least the government should do is to remove the condition of Rs3,000 limit for the distribution of WPPF and WWF," he added.