ISLAMABAD: Shoppers in Pakistan are in shock as prices on popular online marketplaces like Temu and AliExpress have skyrocketed in recent days, in some cases by up to 300 per cent.
The spike came shortly after the federal government introduced new tax measures in the 2025–26 budget, but the situation is more complex than it appears.
What changed?
In the recently passed federal budget, the government introduced the Digital Presence Proceeds Tax Act, which imposes a 5 per cent tax on all goods sold in Pakistan by foreign digital platforms that do not have a physical presence in the country. In addition, these platforms must now also pay the standard 18 per cent sales tax that applies to local businesses.
This move is intended to level the playing field. Until now, foreign sellers were able to operate in Pakistan without paying the same taxes that local manufacturers and retailers are required to, which include not only 18 per cent sales tax, but also income tax as high as 35 per cent.
Prices increased, but not because of the tax alone
While the new tax regime certainly affects the cost of imported goods, experts and users say it doesn’t justify the sudden and steep 200–300 per cent price hikes on platforms like Temu and AliExpress.
According to online discussions, particularly on Reddit, many believe that the drastic jump in prices is more likely a precautionary move by Temu rather than a direct result of the taxes. With uncertainty around how exactly the new taxes will be applied, and how much duty each category of product might attract, Temu appears to have raised prices across the board to cover any potential extra costs.
“Temu has no clarity on the final taxes that will be applied once parcels arrive in Pakistan. Instead of waiting, they’ve increased prices across the board, likely to test the waters,” one Reddit user explained.
Users suggest that Temu might revise these prices downward once they have more information from the first few batches of deliveries under the new rules. Based on estimates, prices could settle at a more reasonable increase of about 10 to 15 per cent, rather than the current inflated rates.
Concerns over shipping and customs
Another part of the confusion relates to changes in shipping channels. Some users speculated that cheaper postal options were being banned, pushing sellers to use expensive services like DHL, further raising costs for customers. However, others familiar with logistics clarified that platforms like Temu still use affordable shipping channels such as Speedaf, which remain unaffected. AliExpress, on the other hand, is reportedly phasing out some shipping methods due to high parcel theft and customs issues within Pakistan.
“Not customs, Temu did this”
There is growing consensus online that the sudden price hikes are not the fault of Pakistani customs authorities or any dramatic change in tax rates, but rather a strategy by Temu to shield itself from unpredictable duties and losses.
“This is not on our customs. Temu is playing it safe and testing new prices until they can figure out the actual impact of the new taxes. Once they have more clarity, prices are expected to drop,” another user said.
The pricing experiment Temu is conducting in Pakistan isn’t unique. The platform has reportedly done the same in countries like Australia and the US, where new fiscal policies or customs regulations were introduced recently.
What now?
For now, many users are urging others to hold off on shopping from these platforms until prices normalise, likely in a few weeks. Once Temu has enough data from actual deliveries under the new rules, it’s expected that prices will be adjusted accordingly.
However, some frustration remains. Critics argue that even if uncertainty exists, raising prices by 200–300 per cent across the board is excessive, especially when the actual tax impact may turn out to be far lower.
“They could’ve tested price changes at 50 per cent or even 100 per cent. But going as high as 300 per cent feels exploitative,” one commenter said.
For now, shoppers are either waiting it out, or reluctantly returning to local alternatives like Daraz, even if they don’t offer the same variety or prices.
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