Punjab Introduces New Digital Tax Deduction System to Promote Cashless Payments

The Punjab government has introduced a new tax deduction system for digital payments across the province, offering lower tax rates on electronic transactions to encourage the use of cashless payment methods and improve tax transparency.

According to official sources, the Punjab Revenue Authority (PRA) will now collect taxes directly through e-payments and card transactions, ensuring that deducted taxes are transferred straight to the government.

Under the new taxation framework, beauty parlors, salons, and fashion designers will be subject to a 5 percent tax on digital payments. The same 5 percent tax will apply to cosmetic surgery, plastic surgery, skin care, and laser treatment centers.

Punjab Introduces New Digital Tax Deduction System to Promote Cashless Payments

Meanwhile, event management companies, tour operators, gymnasiums, and laundry services will be required to pay an 8 percent tax on digital transactions.

The hotel and restaurant sector will operate under a dual tax structure. Customers making cash payments will be charged a 16 percent tax, while those paying through credit cards or other digital payment methods will pay only 8 percent, effectively providing a 50 percent tax reduction for digital transactions.

PRA officials said the initiative is aimed at promoting digital payments, increasing tax compliance, and ensuring greater transparency in revenue collection. They added that taxes collected through the new system will help the government complete welfare and development projects more efficiently.

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The authority has also urged citizens to use digital payment methods and always obtain receipts after making payments to ensure taxes are properly deposited into the government treasury. Consumers have been encouraged to report restaurants and food businesses that fail to issue receipts.

According to the PRA, transparent tax collection is essential for sustainable development, improved public services, and the overall prosperity of Punjab.