KP Approves Landmark Digital Payments Act 2025, Becomes Pakistan’s First Province to Establish Legal Framework for Cashless Economy
Independent Report
PESHAWAR, November 22, 2025 — Chief Minister Khyber Pakhtunkhwa Muhammad Sohail Afridi has approved the groundbreaking Khyber Pakhtunkhwa Digital Payments Act 2025, a major policy milestone aimed at transforming the province into Pakistan’s first legally structured digital and cashless economy. The bill will now be presented to the provincial cabinet for formal approval.
With this initiative, KP has become the first province in the country to introduce a comprehensive legislative framework promoting digital transactions, financial transparency, and modern economic governance.
According to the Chief Minister, the new law mandates QR code–based digital payments across government institutions, commercial enterprises, and the service sector, replacing traditional cash transactions. The shift, he said, will significantly enhance transparency, public convenience, and financial security.
To encourage documentation, previously undocumented businesses registered under the Act will remain exempt from any new direct sales tax on digital payments for two years. Refusal to accept digital payments or imposing additional charges on such transactions will be treated as a legal violation.
The legislation aims to boost financial inclusion, reduce cash dependency, protect consumer and business data, and align Pakistan’s digital payment ecosystem with international standards. Public Wi-Fi and digital services will be introduced in commercial zones, while financial and digital literacy will be integrated into the academic curriculum.
The Chief Minister added that district-level enforcement mechanisms, business onboarding, and comprehensive training initiatives will ensure smooth implementation of the law across the province.
Afridi emphasized that the shift towards digital payments will reduce corruption, stabilize revenue collection, support data-driven policymaking, enhance institutional performance, and—most importantly—strengthen citizens’ trust in public institutions. He said Khyber Pakhtunkhwa is now positioned to serve as a national model for economic modernization.
