Khyber Pakhtunkhwa (K‑P) is poised to become a trailblazer in Pakistan’s digital economy after Chief Minister Sohail Afridi approved the “Khyber-Pakhtunkhwa Digital Payments Act 2025.” This landmark legislation will be taken to the provincial cabinet for formal ratification, making K-P the first province to set up a legal framework specifically for digital payments.
Under the new law, all government departments, businesses, and service providers will be required to switch to QR code–based payments. This move is meant to not only make transactions more convenient and efficient but also increase transparency and reduce the reliance on cash.
One of the most ambitious and socially impactful aspects of the Act is a two-year exemption: informal or previously undocumented businesses that start accepting QR-based payments under the new law will not be hit with new direct sales tax immediately. This is a smart way to move micro-entrepreneurs into the formal economy without scaring them off with sudden tax burdens. But, if a business refuses to accept digital payments—or tries to charge extra for QR code payments—it will be breaking the law.
To make this digital shift work, the government is planning to build out public Wi-Fi zones and offer digital services in markets and commercial areas. They’re also going to include financial and digital literacy lessons in schools, while setting up district-level teams to train businesses and help them adopt the new system.
Afridi says that this law isn’t just about payments — it’s a major step toward a “cashless model economy.” He believes that encouraging digital payments will reduce corruption, stabilize revenue collection, and support data-driven governance. All of this, he argues, will help restore public trust in government institutions and drive K‑P’s digital transformation forward.