Prices of products on popular online marketplaces like Temu and AliExpress have seen a sharp increase in Pakistan following changes introduced in the federal budget 2025–26. Many online shoppers have reported that some items now cost three to four times more than before, raising concerns among consumers.
However, the steep price hike isn’t entirely due to the new taxes.
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Under the newly introduced Digital Presence Proceeds Tax Act, the government has imposed a 5% tax on goods sold in Pakistan from foreign-based digital platforms. In addition, these platforms must now pay an 18% sales tax, just like local businesses.
To compare, a Pakistani manufacturer is already required to pay 18% sales tax and up to 35% in income tax on their products. Until now, foreign companies like Temu and AliExpress were operating without these obligations, giving them an edge over local businesses. The new law aims to level the playing field.
Despite this, the recent 200–300% increase in product prices is not directly linked to the newly imposed taxes. Analysts believe that platforms like Temu may have preemptively raised prices to offset potential unknown duties or complications.
Prices are expected to adjust once the tax implications become clearer in the coming weeks.
