Islamabad, January 24, 2026: In a major legislative development, the National Assembly on Wednesday passed The Corporate Social Responsibility (CSR) Bill, 2026, marking Pakistan’s first-ever statutory framework to govern CSR practices for large companies and listed firms. The move is aimed at enhancing transparency, accountability, and targeted social impact by the corporate sector across the country.
The bill, introduced as a Private Member’s Bill by Pakistan Peoples Party (PPP) lawmaker Dr. Nafisa Shah, received approval after it was reviewed and amended by the Standing Committee on Finance and Revenue. The committee, chaired by Syed Naveed Qamar, sought input from the Securities and Exchange Commission of Pakistan (SECP) and the Law and Justice Division before clearing it for debate in the Assembly.
Under the new law:
- Mandatory Disclosure: All listed companies and large non-listed firms registered with the SECP will be required to disclose details of their CSR activities in their audited financial statements submitted annually to the regulator. These disclosures must also be made publicly accessible via the companies’ official websites.
- CSR Policy Formulation: Companies must prepare and publish a formal CSR policy outlining their CSR strategy, including the financial allocation, geographical focus of activities, and the nature of projects undertaken.
- Encouraged Spending: While the bill encourages firms to allocate at least 1 percent of net profit after tax toward CSR initiatives, it stops short of enforcing any mandatory spending threshold.
- Local Impact Focus: Firms are urged to channel CSR efforts toward the regions in which they operate, thereby enhancing direct benefits to local communities.
- Penalties for Non-Compliance: Failure to make the stipulated CSR disclosures will attract a fine of PKR 500,000, along with an additional daily fine of PKR 1,000 for each day of continued non-compliance.
- Tax Incentives: To promote proactive engagement, the amounts spent on CSR activities will be treated as deductible expenditures for tax purposes, providing a financial incentive for compliance.
Until now, Pakistan lacked a comprehensive legal framework for CSR. Previously, CSR reporting was largely voluntary, guided by non-statutory practices such as the Companies (CSR) General Order 2009 and principles embedded in the Companies Act, 2017, which only required listed firms to mention CSR activities in annual business reviews. There was no binding obligation for other large private companies to report their social contributions.
The passage of the CSR Bill is expected to usher in greater corporate transparency and accountability, increase social investment by the private sector, and align Pakistan with global best practices in sustainable and responsible business conduct.
With approval in the National Assembly complete, the CSR Bill, 2026 will now be forwarded to the Senate of Pakistan for deliberation and passage. Upon Senate approval, it will be sent to the President for assent and take effect as law.
—
