The Punjab government has proposed changes to its sales tax structure for restaurants under the Punjab Finance Bill 2026, introducing a higher tax rate on digital payment methods.
According to the proposed framework, transactions made through debit cards, credit cards, mobile wallets, or QR code payments will now be taxed at 8 percent, up from the current 5 percent.
In comparison, payments made through other methods will continue to attract a significantly higher 16 percent sales tax, maintaining a two-tier structure based on payment mode.
The proposed revision effectively increases the tax burden on digitally processed restaurant payments, including dine-in and takeaway transactions, although they will still remain lower than the rate applied to cash or non-digital payments.
Officials suggest the move is aimed at boosting provincial revenue while also strengthening documentation and transparency in the restaurant sector by encouraging the use of formal digital payment channels. The previous 5 percent rate had been introduced to promote digital transactions, and the new proposal adjusts this incentive structure upward under the revised bill.
