PESHAWAR: Khyber Pakhtunkhwa will become the first province in Pakistan to introduce a comprehensive legal framework aimed at advancing the digital economy when, on Saturday, the chief minister, Muhammad Sohail Afridi, approved ‘Khyber Pakhtunkhwa Digital Payments Act 2025’.

The bill, a step towards establishing a modern and transparent economic structure in the province, will be presented before the provincial cabinet for formal approval, read an official statement issued from the chief minister’s secretariat.

The chief minister stated that under the new law, payment systems across government departments, businesses and the service sector would be made through a mandatory QR code based digital payments.

He said that the adoption of digital transactions would significantly enhance transparency, financial security and public convenience, the statement read.

CM says it will enhance transparency, financial security, public ease

Moreover, for a period of two years from the commencement of the Act, digital payments received by a previously undocumented business entity through a QR Code, registered under KP Digital Payments Act 2025, shall not constitute a basis for the imposition of any new direct sales tax liability, so as to encourage formalisation, whereas refusal to accept digital payments or imposing additional charges on such transactions will be treated as a violation of the law.

The statement read that the legislation was aimed at promoting financial inclusion, reducing reliance on cash and moderning the provincial economy.

Mr Afridi clarified that robust protections for both consumer and business data had been ensured, while the entire digital transaction ecosystem would conform to international standards.

“In order to facilitate the public, the provincial government will introduce public Wi-Fi and other digital services in markets and commercial zones,” the statement quoted the chief minister as saying.

The statement read that the government would integrate financial and digital literacy into the academic curriculum, while strengthening district-level mechanisms to ensure effective implementation of the law, comprehensive training and the seamless on-boarding of the business community.

Mr Afridi emphasised that the KP was poised to become the country’s first cashless model economy, offering a blueprint for the federal government and other provinces to follow.

He said that a modern digital payments system was an essential requirement of the contemporary era and its implementation would not only create ease for citizens and businesses but would also serve as a milestone in improving overall governance.

The chief minister emphasised that the promotion of digital payments would reduce opportunities for corruption, stabilise revenue collection, support data-driven policymaking, enhance institutional performance and, most importantly, strengthen public trust in government institutions.

Published in Dawn, November 23rd, 2025