Restaurant bills set to rise with higher tax

Consumers who pay restaurant bills using debit cards, credit cards, mobile wallets, or QR codes could soon face higher costs under a proposal included in Punjab’s Finance Bill 2026.

The Punjab government has proposed increasing the sales tax rate on restaurant payments made through digital channels from 5 per cent to 8 per cent.

If Finance Bill 2026 is approved, the measure is expected to make dining out more expensive for consumers across the province.

The proposed increase will apply to payments made through debit and credit cards, mobile wallet services, and QR code transactions.

As a result, customers choosing digital payment methods would pay more tax than before, leading to higher bills for both dine-in and takeaway orders.

At the same time, the government has decided to retain the existing 16 per cent sales tax rate on payments made through cash and other conventional methods.

Officials have noted that, despite the proposed increase, the tax rate on digital payments would remain significantly lower than the rate applied to cash transactions.

According to tax authorities, the objective of the proposal is to increase provincial revenue while encouraging greater documentation and transparency within the restaurant sector.

Should the Punjab Assembly approve the Finance Bill 2026, millions of consumers across the province are likely to see an increase in the cost of restaurant meals and related services.