The cost of paying for a taxi by credit or debit card will halve next month, when the state government begins to enforce its decision to slash the surcharge for non-cash payments from 10 per cent to 5 per cent.

The Napthine government's taxi industry inquiry report recommended reducing Cabcharge's 10 per cent surcharge for taxi payments.

The Taxi Services Commission announced on Thursday that the surcharge will be halved on February 1. Credit:Angela Wylie

The Taxi Services Commission announced on Thursday that the surcharge will be halved on February 1 to a maximum 5 per cent.

"Providers, operators and drivers who don't comply with this change may be subject to enforcement action, including prosecution," the commission said.