The Punjab restaurant digital payment tax is expected to rise under the Punjab Finance Bill 2026, with the provincial government proposing an increase in sales tax from 5% to 8% on payments made through debit cards, credit cards, mobile wallets, and QR codes, while maintaining a 16% tax on other payment methods.

As outlined in the proposed fiscal framework, payments executed through debit cards, credit cards, mobile wallets, and QR code-based platforms will now incur an 8 percent sales tax, replacing the prevailing 5 percent levy. Meanwhile, every alternative mode of payment, including cash and other conventional channels, will continue to attract a significantly steeper 16 percent sales tax.

If enacted, the amendment will elevate the tax burden on digitally processed dine-in and takeaway purchases. Although the revised 8 percent rate marks a noticeable increase, it still preserves a substantial advantage over the 16 percent tax imposed on non-digital payment methods.

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The provincial administration is expected to capitalize on the revision by expanding its revenue base while simultaneously reinforcing the documentation of commercial activity within the restaurant sector. By incentivizing electronic payment channels through a comparatively lower tax bracket, authorities aim to strengthen transparency and encourage greater participation in the formal economy.

The existing 5 percent concession for digital transactions has remained a defining feature of the current tax structure. However, the latest finance bill signals the government’s intention to recalibrate that incentive, modestly raising the rate while maintaining a fiscal distinction between documented electronic payments and other settlement mechanisms.