China taxes condoms and contraceptives in new push to boost birth rate
China has introduced a 13 per cent value-added tax (VAT) on condoms, contraceptive medicines and related devices, marking a significant policy shift as authorities intensify efforts to address the country’s falling birth rate.
The new tax, which came into force on January 1, ends more than 30 years of tax exemptions on contraceptive products. The move comes amid growing demographic concerns, with China’s population declining for the third consecutive year since 2024, raising alarms over future labour supply and long-term economic growth in the world’s second-largest economy.
After decades of rigid population control under the one-child policy implemented between 1980 and 2015 China has pivoted towards encouraging larger families. The government has rolled out a series of pro-natalist policies aimed at reducing the cost of raising children and supporting young parents.
These measures include a 90 billion yuan (approximately $12.7 billion) childcare subsidy programme, as well as an annual allowance of 3,600 yuan per child under the age of three, scheduled to begin in 2025.
Authorities have also announced that national health insurance schemes will now cover childbirth-related expenses, a move intended to further ease financial pressures on families considering having children.
