Chinese e-commerce platform Temu has hiked prices in Pakistan by up to 300 per cent, with customers reporting huge spikes in prices over the last week. 

This follows the government’s decision to impose new taxes on online sellers last month, including on websites like Temu and AliExpress. 

Although the companies have given no official reason for the price changes, a Temu spokesperson told Nikkei Asia that external policies and rising operational costs across various areas were the cause of the hikes. 

“We remain committed to providing access to quality products at affordable prices, while fully complying with local requirements,” said the spokesperson.

Last month, the government announced that a 5 per cent tax would be imposed on all goods sold in Pakistan by foreign digital platforms that are not physically present in the country, as part of the Digital Presence Proceeds Tax Act. 

Authorities have reportedly targeted online platforms including Facebook, Google, Spotify and Netflix, along with some local online sellers, with this tax.

Additionally, online retail platforms will have to pay the standard 18 per cent sales tax applicable to local businesses in Pakistan. 

The government stated the aim of the increased taxes was to level the playing field of Pakistani businesses which are subject to both the 18 per cent sales tax and an income tax of up to 35 per cent. 

Experts have expressed concerns over the potential damage the digital tax may do to the country’s booming e-commerce market.