The Punjab government has proposed a revised sales tax regime for restaurants. Officials outlined this updated framework in the Punjab Finance Bill 2026 recently. Consequently, dining out will become more expensive for consumers who prefer paying digitally.
Currently, the provincial tax structure applies a 5% rate to digital transactions. However, the new bill seeks to revise this rate upwards. Under the proposed framework, payments made through debit cards, credit cards, mobile wallets, or QR codes will now face an 8% sales tax.
Therefore, this tax hike will directly increase the cost of digitally paid dine-in and takeaway transactions.
Despite the 3% increase in the digital tax rate, paying through formal channels remains the cheaper option. In contrast, all other payment methods will attract a significantly higher 16% tax rate.
| Payment Method | Proposed Sales Tax Rate |
| Debit/Credit Cards, Mobile Wallets, QR Codes | 8% (Up from 5%) |
| All Other Payment Methods | 16% |
The provincial government introduced this move in the Punjab Finance Bill 2026 to achieve two specific goals. First, the higher rates are expected to generate additional revenue for the provincial government.
Furthermore, the government wants to further encourage the documentation of restaurant sales through formal payment channels. By keeping the 8% digital rate lower than the 16% rate applicable to other methods, officials hope to incentivize traceable transactions over cash.
