Finance Ministry, SECP Oppose Mandatory CSR Spending Clause in Proposed 2025 Bill
ISLAMABAD – The Finance Ministry and the Securities and Exchange Commission of Pakistan (SECP) have raised concerns over a key clause in the proposed Corporate Social Responsibility (CSR) Bill 2025, which seeks to make it mandatory for corporations to allocate 1% of their profits to local community welfare.
During a recent session of the National Assembly’s Standing Committee on Finance, both institutions expressed their reservations, warning that such mandatory spending could increase the cost of doing business in Pakistan.
💼 Government Officials Call for Flexibility
The Finance Secretary urged the committee to reconsider the clause, stating that a compulsory 1% contribution could place an additional financial burden on companies. He requested additional time to develop alternative, business-friendly CSR recommendations.
Echoing the same sentiment, the SECP Chairman also rejected the proposed clause, saying that while corporate responsibility is important, imposing mandatory profit-sharing rules could negatively impact operational efficiency and corporate autonomy.
📄 Bill Under Review
The bill is based on a report submitted by a subcommittee headed by Dr. Nafisa Shah, who argued in favor of institutionalizing CSR contributions. She noted that some companies voluntarily allocate up to 1.5% of profits to welfare causes, even establishing family-run charitable foundations.
“With the government already collecting significant taxes such as up to 19% GST, encouraging the private sector to support local communities is more important than ever,” Dr. Shah said.
⏳ One-Month Deadline for Alternatives
The Standing Committee has given the Finance Ministry a one-month deadline to present alternative proposals before deciding the future course of action on the bill.
If passed in its current form, the CSR Bill 2025 could reshape corporate responsibility in Pakistan. However, concerns about its impact on the business climate suggest that a balanced approach may be needed to ensure both economic growth and community development.
