Punjab Proposes Higher Tax on Restaurant Card and Digital Payments

The Punjab government has proposed a revised sales tax regime for restaurants in the Punjab Finance Bill 2026, which would increase the tax rate on digital payments.

Under the proposed framework, payments made through debit cards, credit cards, mobile wallets or QR codes will be subject to an 8 percent sales tax, up from the existing 5 percent.

In contrast, all other payment methods will attract a higher 16 percent tax rate.

The proposed change would raise the sales tax on restaurant payments made through debit cards, credit cards, mobile wallets and QR codes from 5 percent to 8 percent, increasing the cost of digitally paid dine-in and takeaway transactions while still keeping them lower than the 16 percent rate applicable to other payment methods.

The move is expected to generate additional revenue for the provincial government and further encourage documentation of restaurant sales through formal payment channels. The lower 5 percent rate had already been in place under the existing tax structure, and the new bill seeks to revise it upwards.