The Punjab Revenue Authority (PRA) has implemented a new and simplified tax deduction system for digital payments across the province, offering significant tax incentives for consumers and businesses using electronic payment methods.

According to a PRA spokesperson, taxes deducted through e-payments, debit cards and credit cards will now be transferred directly to the government, improving transparency and reducing the chances of tax evasion.

Under the revised framework, beauty parlours, salons and fashion designers will be subject to a reduced tax rate of 5 percent on digital transactions. The same 5 percent rate will apply to cosmetic surgery clinics, plastic surgery centers, skin treatment facilities and laser treatment services.

Meanwhile, event management companies, tour operators, gyms and laundry services will be charged an 8 percent tax rate on digital payments.

The hospitality sector has received one of the biggest incentives. Hotels and restaurants will face a 16 percent tax rate on cash payments, while customers making digital payments will pay only 8 percent. This effectively reduces the tax burden by 50 percent for transactions conducted through cards and other digital channels.

PRA officials said the initiative is designed to promote a cashless economy, improve tax collection and support the timely completion of public welfare and development projects funded through tax revenues.

The authority has also urged citizens to request proper receipts after making payments and report food businesses that fail to issue official invoices. Officials warned that action could be taken against non-compliant businesses.

The PRA emphasized that transparent tax payments are essential for economic growth, better public services and long-term prosperity across Punjab.