The Punjab government has announced a 50% tax relief for businesses and customers who use digital payment methods. The new policy is designed to encourage cashless transactions, increase the use of digital payments, and improve transparency in the tax system.
Under the new rules introduced by the Punjab Revenue Authority (PRA), hotels and restaurants will pay an 8% tax on payments made through digital methods such as debit cards, credit cards, mobile banking, and other electronic payment systems. In comparison, cash payments will continue to be taxed at 16%.
Officials say the difference in tax rates is intended to encourage businesses and customers to choose digital payment options instead of cash. They believe this will make financial transactions more transparent and help reduce the use of undocumented cash payments.
The policy also introduces automatic tax deduction through electronic payments and card transactions. This system is expected to make tax collection easier, improve compliance with tax regulations, and reduce the chances of errors in tax reporting.
According to the Punjab government, greater use of digital payments will strengthen revenue collection and support better financial management. Officials say the additional revenue can help fund public welfare programmes, infrastructure projects, and other development initiatives across the province.
The government believes that promoting digital payments will benefit both businesses and consumers by making transactions faster, safer, and more convenient. It is also expected to support Pakistan’s broader efforts to expand the digital economy and modernize financial services.
Authorities have encouraged businesses to adopt digital payment systems and take advantage of the reduced tax rate.
They say the new policy is an important step toward building a more transparent, efficient, and technology-driven economy while supporting long-term economic growth and improved public services.
