Punjab Raises Card Payment Tax, Calls It 50% Relief

The Government of Punjab has been easily caught peddling another tax relief campaign after increasing the sales tax on digital payments while promoting the move as a 50 percent tax relief for consumers.

Tax expert Amer Sharif told ProPakistani, “The government is framing the policy as a 50% relief by comparing the 8% GST on digital payments with the 16% rate on cash transactions. They tried to ignore how the digital payment tax itself has been increased from 5% to 8%”.

He said that the comparison with the 16 percent tax rate obscures the fact that digital users will still pay more tax than they did previously.

Under the new tax structure, customers paying through debit cards, credit cards, or other digital payment methods will pay 8 percent GST, while those making cash payments will be charged 16 percent GST.

The government has promoted the measure as a 50 percent reduction in tax for digital payments compared to cash transactions.

Punjab tried to promote digital payments and improve tax documentation for consumers to pay electronically instead of using cash. The idea is great, but the delivery was wrong.