The Punjab government has introduced a new tax policy to encourage digital payments, offering 50% tax relief on restaurant bills paid through credit cards, debit cards, and other electronic payment methods. The revised tax rates have been implemented by the Punjab Revenue Authority (PRA) and apply to various service sectors across the province.
Under the new system, customers who pay their restaurant bills digitally will be charged 8% sales tax, while those paying in cash will continue to pay 16% sales tax. This effectively cuts the tax burden in half for digital transactions, encouraging consumers and businesses to move towards cashless payments.
The reduced tax rate applies to a wide range of food businesses, including restaurants, cafés, coffee shops, ice cream parlours, fast-food outlets, and other ready-to-eat food service establishments. Taxes on digital payments will be deducted electronically and transferred directly to the government under the new mechanism.
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In addition to restaurants, the revised tax structure also covers several other service industries. Businesses such as beauty salons, beauty parlours, fashion designers, cosmetic surgery clinics, plastic surgery centres, skincare clinics, and laser treatment services will now be subject to a 5% tax rate under the updated policy.
The Punjab government says the initiative is designed to promote a cashless economy, improve tax compliance, increase transparency in financial transactions, and expand the use of digital payment systems throughout the province.
Business owners and consumers are expected to benefit from the simplified tax collection process, while the government aims to strengthen revenue collection through electronic transactions. The move also aligns with Pakistan’s broader efforts to modernize its financial system and encourage digital banking.
The new tax policy is now in effect across Punjab, making digital payments a more affordable option for customers while supporting the province’s transition toward a transparent, technology-driven economy.
