The Punjab government has proposed a significant change to the sales tax structure for restaurants under the Punjab Finance Bill 2026. According to the proposed plan, customers who pay through digital methods such as debit cards, credit cards, mobile wallets, and QR codes will face an 8 percent sales tax, compared to the current 5 percent rate. While this represents an increase for digital transactions, it remains lower than the 16 percent sales tax that will apply to other payment methods.
The new proposal is aimed at increasing provincial revenue while continuing to encourage the use of documented and transparent payment channels. Over the past few years, lower tax rates on digital payments have been used as an incentive to promote cashless transactions and improve record-keeping in the restaurant industry. The revised framework maintains that incentive by keeping the digital payment tax rate lower than the rate applied to other forms of payment.
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For restaurant customers, the change means slightly higher costs when paying through cards, mobile banking applications, or QR code systems. However, digital payments will still offer a tax advantage compared to traditional payment methods that fall under the higher 16 percent tax bracket. Industry experts believe the move could help strengthen tax compliance and improve the documentation of restaurant sales across Punjab.
The proposed increase is part of broader efforts by the provincial government to expand the tax base and generate additional revenue without completely removing incentives for digital transactions. If approved, the new tax regime will affect both dine-in and takeaway orders paid through electronic channels. As discussions on the Punjab Finance Bill 2026 continue, restaurant owners and consumers alike will be closely watching how these proposed tax changes impact prices, business activity, and the growing shift toward digital payments in Pakistan.
