The Punjab government has proposed changes to the sales tax system for restaurants through the Punjab Finance Bill 2026.
Now, customers who pay through digital methods such as debit cards, credit cards, mobile wallets, and QR codes will have to pay a higher sales tax than before.
According to the proposed plan, the sales tax on digital payments will increase from 5% to 8%. Although it will still remain lower than the tax charged on other payment methods, such as cash or other non digital methods of payment, which will continue to be taxed at a much higher rate of 16%. The new policy will affect both dine in and takeaway restaurant orders. Customers who prefer paying digitally may notice a slight increase in their total bill due to the higher tax rate.
The change is introduced by the Punjab government to increase provincial revenue and encourage businesses to record their sales through official and traceable payment channels. Authorities believe that promoting documented transactions can improve transparency and help reduce the informal cash economy.
Previously, 5% tax rate was introduced to encourage people to adopt digital payment systems. Officials expect the revised taxation policy to generate additional income for the provincial government. Such steps are continued efforts to modernise Pakistan’s payment ecosystem. Authorities maintain better records through digital transactions of business activities and improve tax collection efficiency.
If the proposal is approved, it will become part of Punjab’s updated tax framework for the upcoming financial year.
Earlier, the government of Punjab increased the token tax on cars, announcing a tax reform package in the budget for the year 2026-27.
As per the authorities, the token tax on commercial and large vehicles, which are more than 1,000cc, has been increased after an interval of 20 years.
The car dealers, on the other hand, have been declared a withholding agent for the collection of tax.
As per the new reforms, the car dealers who are dealing unregistered would be declared not eligible for the government contracts, licences, and No Objection Certificates (NOC).
Read more: Punjab govt increases token tax on cars
