China Taxes Condoms, Contraceptive Pills
China has begun charging value-added tax on contraceptive drugs and devices, ending a three-decade-old exemption as authorities intensify efforts to reverse a sustained decline in births.
From January 1, condoms and contraceptive pills now attract a 13% value-added tax, the standard rate applied to most consumer goods, according to Reuters.
The policy shift comes as Beijing grapples with a shrinking population in the world’s second-largest economy.
China’s population declined for a third consecutive year in 2024, with experts warning that the downward trend is likely to persist.
In recent years, the government has introduced a range of measures aimed at encouraging family formation. These include exempting childcare subsidies from personal income tax and rolling out an annual childcare subsidy last year.
Authorities have also described several initiatives as “fertility-friendly”, including urging colleges and universities to provide “love education” to promote marriage, love, fertility and family in a positive light.
At the annual Central Economic Work Conference last month, top leaders again pledged to promote “positive marriage and childbearing attitudes” as part of efforts to stabilise birth rates.
China’s birth rate has been declining for decades, shaped by the legacy of the one-child policy enforced between 1980 and 2015, alongside rapid urbanisation.
High childcare and education costs, job uncertainty and a slowing economy have further discouraged many young people from marrying and starting families.
