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The Punjab government has proposed increasing the sales tax on restaurant bills paid through debit cards, credit cards, and other digital payment methods as part of its revenue generation strategy for the upcoming fiscal year.
According to the proposal, customers choosing electronic payment options at restaurants may have to pay a higher sales tax than the current rate if the measure receives approval during the provincial budget process. The initiative is aimed at boosting tax collection and strengthening Punjab’s fiscal resources amid growing public expenditure.
Officials say the proposal forms part of broader efforts to increase provincial revenue while supporting budgetary requirements for the new financial year. However, the suggested tax increase has sparked concern among restaurant owners, business groups, and industry representatives.
Restaurant operators argue that imposing a higher tax on digital transactions could discourage customers from using debit cards, credit cards, and digital wallets. They believe such a move may slow the adoption of electronic payments and negatively affect Pakistan’s efforts to build a documented economy.
Industry experts have also pointed out that governments have consistently promoted digital payment systems in recent years to improve financial transparency, reduce cash transactions, and expand tax documentation. They warn that increasing taxes on electronic payments could undermine these objectives and encourage greater reliance on cash transactions.
Despite the concerns, provincial authorities have clarified that the proposal is still under consideration and has not yet become law. The revised sales tax rates will only come into effect if they receive approval through the Punjab Assembly as part of the provincial budget.
If approved, the higher sales tax will apply to restaurant bills paid through banking channels, including debit cards, credit cards, mobile banking, and other digital payment methods across Punjab. The proposal is expected to remain a key topic of discussion during the provincial budget debate.
