KP to digitise all payments to govt by Sept 1

PESHAWAR: In what is being touted as Pakistan’s most ambitious province-wide digital governance transformation, the Khyber Pakhtunkhwa government has announced that it will convert all person-to-government (P2G) payments to digital mode from September 1, to become the only province in the country to completely adopt cashless digital system.

A senior official, heading the reform programme, told Dawn that the cashless mode of digital system would raise additional revenue of nearly 70 per cent. He termed it one of the most ambitious agenda items of good governance programme.

“We are close to achieving the target to fully implement it by September 1. We are setting the benchmark for every province in Pakistan to follow for all P2G receipts,” he said. He added that the digital initiative would likely result in raising an additional revenue of Rs29 billion or more per annum.

KP has already digitised 148 services. The official said that government had set a target to completely digitise all the 172 services by September 1. The digitisation will eliminate human interaction, make payments easy and enable citizens to pay directly into the province’s kitty.

Official says new mode of payments will increase revenue by 70pc

The official said that finance rules were being amended through Finance Act, 2026, to give legal cover to some of the steps being taken in that regard.

Dr Akif Khan, the managing director of KP Information Technology Board (KPITB), who was part of the initiative, led by the Office of ASG (General) under the Chief Secretary’s Good Governance Initiative of the KP government, told Dawn that the drive to make all government payments cashless was being carried out through direct integration of existing online payment platforms and online payment options through a dedicated Mahasil (revenue) app.

He said that the cashless system would be backed by an integrated payment gateway.

Documents available with Dawn showed that the initiative was initially launched in March 2025 that was followed by data collection exercises, resulting in the finalisation of a cashless strategy.

The document said that person-to-government revenue of KP government stood at Rs42 billion per annum that was expected to increase by Rs29.4 billion after going fully cashless. It said that currently all person-to-government payments were done manually and every rupee passed through a physical counter with no digital audit trail and exposed to leakage.

“Since KP Revenue Authority (KPRA) went fully digital, year-on-year revenue growth is clearly visible, measurable and auditable. Leakage has been eliminated as every rupee was tracked from point of collection,” the document stated.

It said that the same model of KPRA would be followed for all account-1 payment, where public deposited money directly in government treasury. It added that following digitisation of fines, imposed by assistant commissioners, collection under that head recorded 69 per cent increase.

The document showed that in 2023, a total of 223,732 manually collected fines generated an amount of Rs223.7 million whereas digital collection of 182,972 fines in 2025 generated Rs378 million, recording an increase of Rs154.3 million.

Similarly, arms licences before digitisation generated Rs1.45 billion in 2022 whereas the same amount went up to Rs1.59 billion after introducing digital payments. In 2025, after full digitisation of arms licences, KP generated Rs2.50 billion, recording revenue growth of Rs1.05 billion.

“Arms licence digitisation delivered 72.7 per cent revenue growth from 2022-25, reducing leakage, stronger compliance and an unambiguous digital audit trail across all transactions,” it said.

Revenue growth projections contained in the document showed that in case of not going digital, all public deposits in the government treasury (account 1) would remain stagnant at the current Rs42 billion.

However, 5pc of digital transactions will result into Rs2.1 billion revenue increase, 50pc digital payment will result into Rs21 billion surge in revenue while over 70pc digitisation would result into a revenue increase of Rs29.4 billion.

Through the account-1 digitisation, 170 services of 34 government departments will be carried out through cashless payment and QR code deployment through Raast and 1-Go platforms.

It said that of a total 172 person-to-government payment account heads under account-1, digital tags were issued for 170 and 148 were digitally enabled while 22 were under process at KPITB. Around 300 non-account-1 services are also in process.

The document stated for non-account-1 services, 698 services have been identified across autonomous bodies, corporations and local government entities. Of these, agreement for 637 have been signed while 218 have been physical submitted to KPITB and 480 are pending. To reduce load on KPITB, 122 entities will sign agreements with commercial banks.

Published in Dawn, June 23rd, 2026

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