Minimum Tax on Turnover Calculator Pakistan 2026-27

It is a floor on your yearly income tax, set by Section 113 of the Income Tax Ordinance 2001. Instead of taxing your profit, the law takes a small percentage of your yearly sales and compares it with the tax on your profit. You pay whichever is higher. It exists so a business with heavy losses, exemptions or reliefs still pays something.

Most businesses pay 1.25% of yearly sales. Gas utilities above Rs. 1 billion of sales, PIA and the poultry industry pay 0.75%. Oil refineries, oil marketing companies and registered motorcycle dealers pay 0.5%. Rice mills, flour mills, petroleum agents, online marketplaces, used-vehicle sellers and linked-up large retailers pay 0.25%. Distributors and wholesalers of listed goods pay 0.5% for 2026-27, up from 0.25%.

Every resident company and every Pakistan branch of a foreign company, regardless of size. A sole trader or partnership is only caught once yearly sales reach Rs. 100 million.

No. The minimum tax replaces the tax on your profit for that year when it is higher. You never pay both. Super tax is different — that one is genuinely added on top.

Yes. That is the point of the rule. A loss means no tax on profit, so the minimum tax on your sales becomes the bill. Enter zero as the normal tax to see what that comes to.

Where the minimum tax comes out higher, the difference is carried forward and can be set against your tax bill in later tax years. How many depends on the year you paid it in: five for 2021-22 and earlier, three for 2022-23 to 2024-25, and two from 2025-26. Guidance quoting five years is not wrong, it is describing an older year.

That is the return’s own line for claiming this carry forward: minimum tax you paid in a past year, above what your normal tax would have been that year, can be set off against this year’s bill there, subject to the five/three/two-year window above. This calculator works out this year’s minimum tax on its own — it does not track the running balance carried forward from your earlier returns, so bring that figure from your own records.

Gross sales and receipts from selling goods, leaving out sales tax, excise duty and any discount shown on the invoice; plus gross fees for services including commission; plus money received for completing contracts; plus a company share of these from a partnership it belongs to. Amounts already settled under a final tax are left out.

The lower 0.5% rate for distributors and wholesalers of listed goods is conditional. The business has to appear on the active taxpayer list under both the Sales Tax Act 1990 and the Income Tax Ordinance 2001. Fall off either list and the ordinary 1.25% applies.

Tax years 2017-18 through 2026-27. The general rate was 1.25%, rose to 1.5% for 2019-20 and 2020-21, then came back to 1.25% from 2021-22. The 2021-22 rewrite also moved trades between the groups, so the calculator offers the groups each year actually had. The Rs. 100 million floor for sole traders and partnerships was Rs. 10 million up to 2020-21.