To encourage digital payments in the Federal Territory of Islamabad, the government has proposed to reduce the rate of tax on credit card payments for restaurant services from 15 percent to 5 percent.

According to the budget document 2023-24, this rate of tax includes services provided by restaurants including cafes, food (including ice cream) parlors, coffee houses, coffee shops, deras, food huts, eateries, resorts, and similar cooked, prepared or ready-to-eat food service outlets, etc.

As per the proposal, the tax rate has been set at 5 percent where payment against services is received through debit or credit cards, mobile wallets, or QR scanning subject to the condition that no input tax adjustment or refund shall be admissible; and 15 percent where payment is received in cash.

A 15 percent tax has been proposed on services provided or rendered by hotels, motels, guest homes, farmhouses, marriage halls, lawns, clubs, and caterers.

Source: Pro Pakistani