The Finance Ministry and the Securities and Exchange Commission of Pakistan (SECP) have opposed a key provision in the proposed Corporate Social Responsibility (CSR) Bill 2025 that would make it mandatory for corporations to allocate a portion of their profits to social welfare activities.
During a meeting of the National Assembly’s Standing Committee on Finance, both the ministry and SECP expressed concern that the proposed requirement to spend 1 percent of corporate profits on local community welfare would increase the cost of doing business.
The Finance Secretary argued that such obligations would financially burden companies and requested time to develop alternative recommendations. The Chairman SECP also rejected the proposed clause, citing its potential negative impact on corporate operations.
The bill was reviewed based on a report submitted by a subcommittee led by Dr. Nafisa Shah, which recommended institutionalizing CSR contributions to ensure direct community benefit. The lawmaker pointed out that some companies already spend up to 1.5 percent of their profits on welfare and have even established family foundations. She also highlighted that despite the government collecting various taxes, including up to 19 percent GST, additional private sector participation in community development is essential.
The Standing Committee gave the Finance Ministry one month to present alternative proposals before proceeding further with the bill.
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