Daily Times

Globally, Civil Society has been considered an important stakeholder of development. It is viewed as a different entity from government and business, manifests the interest and will of citizens. The concept prevailed since the 18th century, Age of Enlightenment but gain popularity after World War II. They are broadly categorized into Service Delivery Organizations, focused on areas such as education, health, emergency services etc and Advocacy Based Organizations, focusing on issues of human rights, refugees, legislative challenges etc. Although, civil society plays the pivotal role in developing and shaping the communities but its role has yet to be identified in developing countries.

Pakistan faced numerous challenges specifically after independence, at the time the country had stranded on challenges of settling the refugees with scarce financial resources. In this challenging situation, the coalesced work of all stakeholders lessen the situation. Earlier, the dominating work of women had the significant impact on socio economic development of the country. In 1948 Begum Rana Liaquat Ali Khan established the Women’s Volunteer Service for Refugee Rehabilitation and All Pakistan Women’s Association (APWA)helping numerous migrants through different ways. Later,the others follow the road map set by the founding members and took active role in strengthening the civil society sector.

The role of civil society has been widely accepted as to supplement or support the government in time of need. The government inability to address plethora of socio economic and developmental challenges due to limited resources eventually created the vacuum filled by the third sector called as civil society organizations (CSOs). Although, CSOs work on almost all areas of social development and delivered services to countless individuals in need. The shining examples are LRBT, SIUT, TCF etc.

Although, CSOs in Pakistan works in almost every area of attention along with advocating human and gender rights etc. Though the government has no reliable date on the magnitude of the sector but a 2002 study reported around 45,000 non-profit organizations (NPOs) registered along with 60,000 non-registered NPOs are working across Pakistan with six million members and 250,000 employees.

Despite the fact that civil society in Pakistan contributing significantly on the socio-economic development and engaged enormously in developing and shaping public policies and awareness campaign about the individuals rights and responsibilities. Regardless of CSOs massive work government increasingly regulating the sector which increases the tension among stakeholders and affecting the people in need.

The role of civil society has been widely accepted as to supplement or support the government in time of need. The government inability to address plethora of socio economic and developmental challenges due to limited resources eventually created the vacuum filled by the third sector called as civil society organizations (CSOs)

Here arises an interesting question, what are the challenges faced by CSOs in Pakistan. There are plenty of challenges faced by CSOs some of them will be highlighted in the article. Firstly, deteriorated legal environment, CSOs are registering under six different acts and ordinance causing difficulty for government to monitor activities of CSOs and to update the database. Although each registration authority has advantages and disadvantages but the most credible among them is Companies Act, 2017 which has rigorous process and comparatively lengthy and costly. Large CSOs usually take this route in order to get government recognition but smaller CSOs usually operating in far flung areas havinglimited resources and access to such facilities thus facing trouble in registration.

Secondly, pursuant to national priority to curb terrorist financing, government is increasingly regulating foreign funding. The 2013 Policy for Regulation of Organization receiving Foreign Contributions must register and sign memorandum of understanding (MoU) with Economic Affairs Division (EAD) declaring their geographical areas of operations, sources and amount of funds received. The 2015 Policy for Regulation of International Non-Governmental Organizations (INGOs) in Pakistan required all INGOs to register with Ministry of Interior (MOI). Although, government has all the right to monitor the financial activities but bureaucratic delay causing enormous time, effort and money. Government denied the registration of various INGOs, thus they discontinued their operations ensuing inunemployment, this also raises the question of who will support the distressing communities as state in unable to reach out.

Thirdly, the challenge to get the NOCs which is required certain parts of the country facing critical security issues, such as the area formerly known as the Federally Administered Tribal Areas (FATA). NOCs are approval letters from particular government agencies for various purposes, such as implementing projects in, traveling to, or holding events in particular areas. Requirements for NOC requests, such as proof of registration and details of the foreign and Pakistani nationals employed by a CSO, can be extensive. Rejection of NOC requests or delays in processing affected CSOs’ operations.

Finally, the tax treatment enacted through Finance Act 2017 have two conditions,first, CSOs will only be tax-exempt if, among other conditions, their administrative and management expenses-including administrative salaries, rent, and utilities-do not exceed 15 percent of their budgets. Second, unrestricted surplus funds above 25 percent of the budget will be taxed at a 10 percent rate. The cap on administrative expenses is not applicable to CSOs that initiated their charitable and welfare activities in the last three years and have total receipts of less than Rs 100 million during the tax year.

Service delivery organizations, such as those that run schools, hospitals, and training centers, oppose the policy since a substantial portion of their budgets goes to administrative expenses. In addition, some believe that the conditions on surplus funds could discourage CSOs from saving funds for long-term sustainability. Registered CSOs may enjoy tax benefits if they have been approved by the relevant Commissioner of the Federal Board of Revenue (FBR) under Section 2(36) of the Income Tax Ordinance of 2001. CSOs can apply for certification from the Pakistan Centre for Philanthropy (PCP) for tax exemption. Individual donors receive a 30 percent tax credit on donations to approved organizations, while corporate donors receive a 20 percent tax credit.

These challenges are legislative in nature and have lasting impact on the operations and service delivery of CSOs which could easily be tackled through effective policy. The other pertaining challenges for CSOs are related to funding, shrinking public space and public image etc. To deal with the legislative challenge, one possible suggestion is initiating one window operation for CSOswhich can potentially resolve most issues. Through one window a specific government department would be responsible for dealing with all matters pertaining to the operations, registration, NOCs, foreign and domestic funding, guidance on tax exemptions. In this manner, processes can be streamlined, the flow of information can be managed, systems can be standardized and bureaucratic delays can be reduced.

The writer is a Program Officer – Research Pakistan Centre for Philanthropy (PCP)