3 min read
In a move stirring frustration among e-commerce users, AliExpress has begun adding steep tax charges sometimes 70% to 80% of the product cost to orders placed by Pakistani customers, even though the government had recently revoked the digital presence tax.
Earlier this year, the federal government attempted to regulate cross-border online commerce by introducing a 5% digital presence tax on foreign e-commerce platforms, alongside stricter import thresholds and tax collection mandates. However, amid backlash and concerns over its impact, the Federal Board of Revenue (FBR) announced a rollback of this digital tax, applying it retroactively from July 1, 2025.
In practice, AliExpress now shows separate “Tax” line items at checkout, causing dramatic price hikes on small-value orders for example, a $36.96 order attracting $25.87 in taxes, pushing total cost to $62.83 (an increase above 70 %). While AliExpress has not released an official response, its checkout breakdown states: “taxes are listed separately under ‘Tax’ at checkout.” Analysts suggest such steep markups may deter consumers from cross-border e-commerce and drive them toward local marketplaces.
Interestingly, Temu, another major Chinese e-commerce platform, also appears to be facing similar changes. Reports indicate that prices on Temu for Pakistani users have spiked up to 300% following the government’s move to impose new import-related taxes on foreign sellers. Social media discussions reflect similar complaints, with one post noting, “TEMU has just doubled or even tripled the prices of all its products.”
Why Are Prices Rising?
Some observers ask: if the digital levy was rolled back, why are vendors still hiking tax charges? The main reason behind these unexpected surges lies in import duties and lowered tax-free limits. Although the digital levy was rolled back, other taxes remain. The duty-free import threshold has been reduced from Rs5,000 to Rs500, meaning even small items now attract customs, GST, and processing fees. Platforms may also be including handling and compliance charges to offset regulatory costs.
As one frustrated customer remarked in online forums: “The prices have increased since July 1. Earlier, shipping fees were high. Now they’ve made shipping free but added the same amount as tax. So, the total rates are the same as before.””
The tension between encouraging e-commerce growth and taxing imports remains unresolved. For now, Pakistani buyers of AliExpress and Temu goods must navigate a system where advertised price and final checkout cost can differ dramatically even after policy reversals meant to ease the burden.
Market analysts warn this trend could dampen consumer appetite for small foreign orders and divert orders toward local platforms.
As one observer noted,
“the new system makes affordable small imports significantly more expensive.”
This development underscores a tension: while the government has removed one form of tax on foreign goods, online shoppers in Pakistan may still face hidden cost burdens at the point of sale a reminder that tax policy changes don’t always translate immediately into consumer relief.
