The move comes as Beijing struggles to boost birth rates in the world’s second-largest economy. China’s population fell for a third consecutive year in 2024, and experts have cautioned that the downturn will continue
The new Value Added Tax (VAT) on condoms and other forms of contraceptives came into effect in China on January 1, as the country faces a population crunch. The measure has removed contraceptive drugs and devices from a three-decade-old tax exemption.
Condoms and contraceptive medicines will now incur a VAT of 13 per cent, the standard rate for most consumer goods.
The move comes as Beijing struggles to boost birth rates in the world’s second-largest economy. China’s population fell for a third consecutive year in 2024, and experts have cautioned that the downturn will continue.
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China’s plummeting birth rate has made its leadership anxious, with the government now shifting from its stringent one-child policy to a suite of “carrots” to induce people to have more children.
Raising taxes on condoms is largely a symbolic gesture. A standard pack typically sells for 40 to 60 yuan ($5.70–$8.50), while a month’s supply of the contraceptive pill, available over the counter, costs between 50 and 130 yuan.
Yun Zhou, an assistant professor of sociology at the University of Michigan, said the new tax was unlikely to change people’s choices, but it sent a signal from the government about “what desirable family behaviour should be.” She added that if contraception became harder to access, “the brunt of the negative effects will be borne by women, particularly by disadvantaged women.”
What are some other measures taken?
China exempted childcare subsidies from personal income tax and rolled out an annual childcare subsidy last year, following a series of “fertility-friendly” measures in 2024, such as urging colleges and universities to provide “love education” to portray marriage, love, fertility and family in a positive light.
Top leaders again pledged last month at the annual Central Economic Work Conference to promote “positive marriage and childbearing attitudes” to stabilise birth rates.
China’s birth rates have been falling for decades as a result of the one-child policy China implemented from 1980 to 2015, and rapid urbanisation.
The high cost of childcare and education as well as job uncertainty and a slowing economy have also discouraged many young Chinese from getting married and starting a family.
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