The Finance Ministry and the Securities and Exchange Commission of Pakistan (SECP) have voiced strong opposition to a key provision in the proposed Corporate Social Responsibility (CSR) Bill 2025, which would require corporations to allocate a fixed portion of their profits to social welfare initiatives.

During a session of the National Assembly’s Standing Committee on Finance, both institutions raised concerns over the bill’s clause mandating companies to spend 1 percent of their profits on local community welfare. Officials argued that such a requirement would increase the cost of doing business and place an additional financial burden on the corporate sector.

The Finance Secretary requested additional time to develop alternative recommendations, warning that the proposed obligation could strain company finances. The SECP Chairman echoed these concerns, stating that the clause could negatively impact corporate operations and competitiveness.

The committee reviewed the bill based on a report from a subcommittee led by Dr. Nafisa Shah, which advocated for institutionalizing CSR contributions to ensure direct benefits for local communities. Dr. Shah noted that some companies already voluntarily spend up to 1.5 percent of their profits on welfare and have established family foundations. She also emphasized the need for greater private sector involvement in community development, despite the government’s collection of various taxes, including a GST of up to 19 percent.

After deliberation, the Standing Committee granted the Finance Ministry one month to present alternative proposals before moving forward with the bill.