PRA cracks down on restaurants violating tax laws

LAHORE: The Punjab Revenue Authority (PRA) has launched a crackdown on restaurants levying 16pc sales tax on credit and debit cards in violation of sales tax laws.

The Punjab government had reduced the sales tax rate on credit and debit cards to restaurant owners from 16pc to 5pc for the current fiscal year (FY21), yet there were complaints from customers that many restaurants were still charging 16pc sales tax.

The PRA spokesperson said that the authority has taken notice of the matter and has decided to crackdown on violating restaurants. “We have been receiving complaints from people and we have now issued notices to some restaurants. If restaurant owners do not comply with tax laws, strict action will be taken against them.”

Asim Javed, a resident of DHA, said that restaurant owners usually deduct full tax on payments made through credit or debit cards, whilst claiming that the “government has not given any tax exemption”.

Many other Lahori residents have reported having to pay 16pc tax at various restaurants despite the deduction from the government.

Abdul Moeed, the owner of Wasabi restaurant, told this scribe, “We charge only 5 per cent tax on credit and debit card payments and we have been following this decision by the government ever since. This is a very simple process as it gives a discount to the customer and the tax goes to the exchequer. We have been regularly submitting the tax collected on cash payment to the government.”

Shahab Omer
The writer is a member of the staff and can be reached on [email protected]

6 COMMENTS

  1. As part of the Digitisation of Pakistan this practise should across the board for Pakistan all eatries, restaurants, Dhabas should follow this. This will improve the traffic to the eatries particularly small Khokha, Paway, Kharoray, Kata Kat provide employment, revenue to the eatry and its piece of the pie to the Government of Punjab,
    I wonder why it is not in Karachi and other cities of Pakistan, and whee is FBR. They should wake up now, for Muk Muka finished. The FBR intelligence is gathering revenue to the state, and food price lowered. Thans Pro Pk with Profit. Best wishes

  2. What is the source of government’s decision on reduced tax rates for credit card payments? I haven’t been able to track this myself, so asking here… Please share of you have link to the page where this ruling was announced

  3. Why Mcdonalds continues to charge 16% Sales Tax on card payments? I challenged then and they said they have a stay order from court. Isn’t it shameful that instead of passing the benefit to their customers they are sheltering behind court stay orders.

  4. Why is Burning Giraffe mall one charging 16% on debit/card payments? I would like to complaint about this please check them

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