Why Did Temu & AliExpress Prices Suddenly Increase in Pakistan?

Pakistani shoppers were left shocked this week as prices on popular e-commerce platforms Temu and AliExpress suddenly surged overnight, sparking widespread confusion and complaints online. The unexpected price hikes, which reportedly took effect from July 1, are linked to the government’s newly imposed taxes on foreign online purchases under the Digital Presence Proceeds Tax Act, 2025. Many customers reported checkout prices jumping by 5-10% without warning, leaving budget-conscious buyers scrambling for alternatives

Pakistani government had introduced new taxes on digital payments and foreign online shopping, leading to expected price hikes on popular e-commerce platforms like AliExpress and Temu.

The measures, announced by Finance Minister Muhammad Aurangzeb as part of the 2025-26 budget, include the Digital Presence Proceeds Tax Act, 2025, which imposes levies on international vendors selling to Pakistani consumers.

Changes in Online Taxes:

Digital Payments:

– 1% tax on transactions below Rs10,000

– 2% tax on payments between Rs10,000-Rs20,000

– 0.25% tax on amounts above Rs20,000

Cash on Delivery (COD):

– 0.25% tax on electronics

– 2% tax on clothing

– 1% tax on all other items

Foreign E-Commerce (AliExpress, Temu, Amazon, etc.):

– 5% tax on all purchases, collected by banks or payment gateways

– Customs to block deliveries unless tax is paid

Additionally, foreign companies running social media ads in Pakistan will also pay a 5% tax on their ad spending.

Immediate Impact: Prices Shoot Up on Temu & AliExpress

Pakistani shoppers were met with sharp price increases on July 1, as the new tax structure took effect. Many users reported higher checkout costs on Temu and AliExpress, with some items now 5-10% more expensive due to the additional levy.

While the government argues the move will increase tax revenue and regulate digital commerce, critics say it will hurt consumers who rely on affordable imports.

“This tax directly impacts middle-class buyers who depend on budget-friendly deals from international platforms,” said home-based product curator Ayesha. “Instead of expanding the tax base, it may just push more people toward informal channels.”

E-commerce sellers also expressed concerns, with some fearing reduced sales due to higher costs.