The Punjab government has announced a 50% tax relief for businesses and consumers using digital payment methods, introducing a major incentive to accelerate the province’s transition toward a cashless economy.

Under the new Punjab Revenue Authority (PRA) policy, hotels and restaurants will pay 8% tax on digital transactions, compared to 16% on cash payments, encouraging businesses and customers to adopt electronic payment systems.

The initiative also introduces automatic tax deduction through e-payments and card transactions, a measure aimed at improving transparency, simplifying tax compliance, and strengthening revenue collection.

Officials say the policy is designed to increase the use of digital payment platforms, reduce reliance on cash transactions, and create a more transparent and efficient taxation system. The move is expected to benefit businesses by simplifying tax procedures while promoting greater financial documentation across the economy.

Authorities believe higher digital payment adoption will contribute to improved tax collection, enabling the government to finance public welfare initiatives, infrastructure projects, and other development programs more effectively.

The new policy reflects Punjab’s broader commitment to digital transformation, financial inclusion, and modernizing the province’s revenue system while encouraging businesses and consumers to embrace secure and convenient digital payment solutions.