diff --git a/src/libs/actions/Policy/Category.ts b/src/libs/actions/Policy/Category.ts
index d639c68216df..4f32eb0b81ba 100644
--- a/src/libs/actions/Policy/Category.ts
+++ b/src/libs/actions/Policy/Category.ts
@@ -482,6 +482,30 @@ function deleteWorkspaceCategories(policyID: string, categoryNamesToDelete: stri
 }
 
 function enablePolicyCategories(policyID: string, enabled: boolean) {
+    const onyxUpdatesToDisableCategories: OnyxUpdate[] = [];
+    if (!enabled) {
+        onyxUpdatesToDisableCategories.push(
+            {
+                onyxMethod: Onyx.METHOD.MERGE,
+                key: `${ONYXKEYS.COLLECTION.POLICY_CATEGORIES}${policyID}`,
+                value: Object.fromEntries(
+                    Object.entries(allPolicyCategories?.[`${ONYXKEYS.COLLECTION.POLICY_CATEGORIES}${policyID}`] ?? {}).map(([categoryName]) => [
+                        categoryName,
+                        {
+                            enabled: false,
+                        },
+                    ]),
+                ),
+            },
+            {
+                onyxMethod: Onyx.METHOD.MERGE,
+                key: `${ONYXKEYS.COLLECTION.POLICY}${policyID}`,
+                value: {
+                    requiresCategory: false,
+                },
+            },
+        );
+    }
     const onyxData: OnyxData = {
         optimisticData: [
             {
@@ -520,6 +544,10 @@ function enablePolicyCategories(policyID: string, enabled: boolean) {
         ],
     };
 
+    if (onyxUpdatesToDisableCategories.length > 0) {
+        onyxData.optimisticData?.push(...onyxUpdatesToDisableCategories);
+    }
+
     const parameters: EnablePolicyCategoriesParams = {policyID, enabled};
 
     API.write(WRITE_COMMANDS.ENABLE_POLICY_CATEGORIES, parameters, onyxData);
diff --git a/src/libs/actions/Policy/DistanceRate.ts b/src/libs/actions/Policy/DistanceRate.ts
index d22299e9e2fc..c10e4d87484c 100644
--- a/src/libs/actions/Policy/DistanceRate.ts
+++ b/src/libs/actions/Policy/DistanceRate.ts
@@ -126,6 +126,39 @@ function enablePolicyDistanceRates(policyID: string, enabled: boolean) {
         ],
     };
 
+    if (!enabled) {
+        const policy = allPolicies?.[`${ONYXKEYS.COLLECTION.POLICY}${policyID}`];
+        const customUnitID = Object.keys(policy?.customUnits ?? {})[0];
+        const customUnit = customUnitID ? policy?.customUnits?.[customUnitID] : undefined;
+
+        const rateEntries = Object.entries(customUnit?.rates ?? {});
+        // find the rate to be enabled after disabling the distance rate feature
+        const rateEntryToBeEnabled = rateEntries[0];
+
+        onyxData.optimisticData?.push({
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.POLICY}${policyID}`,
+            value: {
+                customUnits: {
+                    [customUnitID]: {
+                        rates: Object.fromEntries(
+                            rateEntries.map((rateEntry) => {
+                                const [rateID, rate] = rateEntry;
+                                return [
+                                    rateID,
+                                    {
+                                        ...rate,
+                                        enabled: rateID === rateEntryToBeEnabled[0],
+                                    },
+                                ];
+                            }),
+                        ),
+                    },
+                },
+            },
+        });
+    }
+
     const parameters: EnablePolicyDistanceRatesParams = {policyID, enabled};
 
     API.write(WRITE_COMMANDS.ENABLE_POLICY_DISTANCE_RATES, parameters, onyxData);
diff --git a/src/libs/actions/Policy/Tag.ts b/src/libs/actions/Policy/Tag.ts
index d8cb0ef8b028..dfb41b2d9015 100644
--- a/src/libs/actions/Policy/Tag.ts
+++ b/src/libs/actions/Policy/Tag.ts
@@ -500,7 +500,8 @@ function enablePolicyTags(policyID: string, enabled: boolean) {
             },
         ],
     };
-    const policyTagList = allPolicyTags?.[policyID];
+
+    const policyTagList = allPolicyTags?.[`${ONYXKEYS.COLLECTION.POLICY_TAGS}${policyID}`];
     if (!policyTagList) {
         const defaultTagList: PolicyTagList = {
             Tag: {
@@ -520,6 +521,33 @@ function enablePolicyTags(policyID: string, enabled: boolean) {
             key: `${ONYXKEYS.COLLECTION.POLICY_TAGS}${policyID}`,
             value: null,
         });
+    } else if (!enabled) {
+        const policyTag = PolicyUtils.getTagLists(policyTagList)[0];
+        onyxData.optimisticData?.push(
+            {
+                onyxMethod: Onyx.METHOD.MERGE,
+                key: `${ONYXKEYS.COLLECTION.POLICY_TAGS}${policyID}`,
+                value: {
+                    [policyTag.name]: {
+                        tags: Object.fromEntries(
+                            Object.keys(policyTag.tags).map((tagName) => [
+                                tagName,
+                                {
+                                    enabled: false,
+                                },
+                            ]),
+                        ),
+                    },
+                },
+            },
+            {
+                onyxMethod: Onyx.METHOD.MERGE,
+                key: `${ONYXKEYS.COLLECTION.POLICY}${policyID}`,
+                value: {
+                    requiresTag: false,
+                },
+            },
+        );
     }
 
     const parameters: EnablePolicyTagsParams = {policyID, enabled};
@@ -692,17 +720,17 @@ function setPolicyTagsRequired(policyID: string, requiresTag: boolean, tagListIn
 }
 
 export {
-    openPolicyTagsPage,
     buildOptimisticPolicyRecentlyUsedTags,
     setPolicyRequiresTag,
     setPolicyTagsRequired,
-    renamePolicyTaglist,
-    enablePolicyTags,
     createPolicyTag,
-    renamePolicyTag,
     clearPolicyTagErrors,
     clearPolicyTagListError,
     deletePolicyTags,
+    enablePolicyTags,
+    openPolicyTagsPage,
+    renamePolicyTag,
+    renamePolicyTaglist,
     setWorkspaceTagEnabled,
 };