In a bold move to promote digital transactions, the federal government is considering a proposal to impose an additional charge of up to Rs3 per liter on cash purchases of fuel in the upcoming Budget 2025-26.

The initiative is aimed at discouraging cash payments and encouraging the public to shift toward digital payment methods.

According to official sources, the proposal includes a broader plan to penalize all forms of cash purchases — not just fuel. This means that buyers opting for cash instead of digital payment options at petrol pumps, retail shops, or other outlets may end up paying more. The suggested move to boost digital payments in Pakistan is expected to become part of the Finance Bill for the next fiscal year.

The government is actively working with the corporate sector to implement this policy effectively. Multiple meetings have been held with manufacturers, importers, and large retailers to finalize the framework. If approved, manufacturers and importers may also be allowed to charge an additional 2% tax on cash-based sales.

To ensure the smooth adoption of this shift, steps will be taken to enable digital transactions at fuel stations across the country. These include deploying QR code systems and encouraging the use of debit and credit cards as well as mobile payment apps. The goal is to boost digital payments in Pakistan by making digital options more accessible and cash transactions more costly.

Interestingly, restaurants already enjoy tax exemptions on card-based payments — a model the government is keen to expand across other sectors. However, despite these sweeping changes, sources say salaried individuals should not expect significant tax relief in the new budget. Any tax breaks offered will likely be minimal, leaving little room for financial relief.

Buyers, however, will still have the freedom to pay in cash — but at a price. As per the proposed policy, importers and manufacturers will be required to apply the standard 18% General Sales Tax (GST) on digital transactions with their suppliers and customers, ensuring transparency and ease of record-keeping.

This upcoming policy shift is expected to bring a major change in the way Pakistanis pay for everyday goods and services, especially fuel. By making cash payments more expensive and digital payments more rewarding, the government hopes to usher in a more transparent, traceable, and efficient financial ecosystem.