LAHORE: The Punjab government has launched a simplified digital tax deduction system designed to promote transparency, ease the burden on taxpayers and encourage a wider shift toward digital payments across the province, officials announced on Friday.
Under the new mechanism, sales tax collected through e-payments and card transactions will now be transferred directly to the government, a move authorities say will significantly enhance transparency and efficiency in tax collection. A spokesperson for the Punjab Revenue Authority said sales tax on services offered by beauty parlours, salons and fashion designers has been fixed at 5 percent. Cosmetic surgery, plastic surgery, skin treatment and laser treatment centres will likewise fall under the 5 percent bracket, while event management services, tour operators, gymnasiums and laundry services will be taxed at 8 percent. In the hotel and restaurant sector, the new structure offers a clear incentive for digital payments. Customers paying in cash will be charged 16 percent sales tax, while those paying through digital means, including credit and debit cards, will pay just 8 percent, effectively halving the tax rate for cashless transactions.
The spokesperson said tax revenue collected from the public plays a critical role in funding the Government’s welfare and development initiatives, and urged citizens to opt for digital payments wherever possible and to always obtain a proper tax invoice to ensure funds are transparently and securely channelled to the government.
The public was also asked to report any food outlets or service providers found failing to issue valid tax invoices to the Punjab Revenue Authority.
Copyright Business Recorder, 2026
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