Bill clashes with economic realities, may stall investment.
Staff Report
ISLAMABAD: President of the Pakistan Business Network, Omar Butt, has voiced strong opposition to the proposed Corporate Social Responsibility (CSR) Bill 2025, warning that it could impose unjustified financial burdens on Pakistan’s already struggling business sector.
The bill aims to require corporations with an annual turnover exceeding Rs 1 billion to allocate at least 1% of their net profits to community welfare and development projects. While the intent is to institutionalize CSR, Butt argues that the approach is flawed and risks undermining business viability.
“CSR should be encouraged, not enforced through legislation,” Omar Butt said while speaking to the business community. Pakistan’s corporate sector is already grappling with high energy costs, erratic taxation, and policy instability. Adding another mandatory financial obligation will only discourage investment and growth, he warned.
The business leader criticized the bill for ignoring the diversity of business models and profit margins across industries. Not all companies operate with surplus profits. Forcing a uniform CSR quota disregards economic realities and penalizes responsible businesses that already contribute voluntarily.
Omar Butt also questioned the government’s capacity to monitor and ensure the transparent utilization of CSR funds. Without a credible oversight mechanism, this bill risks becoming another bureaucratic funnel with little impact on ground-level development.
Butt urged policymakers to shift their focus from coercive mandates to creating incentives for CSR. He emphasized that tax rebates, public recognition, and partnership frameworks can do far more to promote sustainable corporate engagement than blanket compulsion.
Referring to global practices, he noted that few countries enforce mandatory CSR spending, with India being a rare exception. Pakistan should learn from international models, rather than replicating policies that have yielded mixed results.
He concluded by stressing the importance of broader stakeholder consultation and a shift from symbolic legislation to practical reform. He emphasized the need for policies that empower both businesses and communities, not ones that pit them against each other.
Legal experts have also raised concerns, arguing that mandatory CSR contributions could be challenged as an overreach into private enterprise autonomy. No fiscal obligation should be imposed without clear constitutional backing, they say.
Several chambers of commerce are now expected to submit formal objections to the bill. Stakeholders warn that rushed legislation without sectoral dialogue could further damage Pakistan’s fragile investment climate.
