Lahore: Restaurant customers in Punjab will pay a higher sales tax on digital payments from July 1, as the provincial government has increased the tax rate on eligible electronic transactions from 5% to 8% under the Punjab Finance Act 2026.
The revised rate applies to dine-in and takeaway orders paid through debit cards, credit cards, mobile wallets and QR code-based payment systems.
Under the new tax regime, customers using these digital payment methods will now pay an 8% sales tax, up from the previous 5%. Payments made through all other methods, including cash, will continue to attract a 16% sales tax.
The increase is part of the Punjab government’s revenue measures for the new fiscal year. However, digitally paid restaurant transactions will continue to benefit from a lower tax rate than cash and other non-digital payments, as the government seeks to encourage documented transactions and wider adoption of formal payment channels.
The earlier 5% rate had been introduced to promote digital payments and improve documentation of restaurant sales. While the latest revision reduces the tax advantage for electronic payments, they remain subject to a significantly lower sales tax than non-digital transactions.
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