Punjab Introduces Reduced Tax Rate for Digital Payments at Restaurants and Other Services

Lahore: The Punjab government has introduced a new digital tax deduction system across the province to promote transparent tax collection and encourage cashless transactions.

Under the new system, taxes deducted through debit and credit card payments will be transferred directly to the government’s account, ensuring greater transparency in revenue collection, according to the Punjab Revenue Authority (PRA).

To encourage digital payments, the government has reduced the sales tax on hotel and restaurant services from 16 percent on cash payments to 8 percent for payments made via debit or credit cards.

The revised tax structure also sets a 5 percent tax rate for beauty parlours, salons, fashion designers, cosmetic surgery, plastic surgery, and laser treatment services.

Meanwhile, event management companies, tour operators, and gym services will be subject to an 8 percent tax.

The PRA has urged citizens to prefer digital payment methods and always request an official receipt after receiving a service. The authority also advised the public to report any business that refuses to issue a proper receipt through its official complaint platforms, warning that legal action will be taken against violators.