- China will impose a 13% value-added tax on contraceptive drugs and devices, including condoms, for the first time in three decades.
- The revision to the Value-Added Tax Law also exempts child-care services, elder-care institutions, disability service providers, and marriage-related services from the tax.
- The changes are part of China’s efforts to reverse plunging birth rates and encourage people to have more children, as the population has shrunk for three consecutive years.
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China will impose a value-added tax on contraceptive drugs and devices — including condoms — for the first time in three decades, its latest bid to reverse plunging birth rates that threaten to further slow its economy.
Under the newly revised Value-Added Tax Law, consumers will pay a 13% levy on items that had been VAT-exempt since 1993, when China enforced a strict one-child policy and actively promoted birth control.
At the same time, the revision carves out new incentives for prospective parents by exempting child-care services — from nurseries to kindergartens — as well as elder-care institutions, disability service providers and marriage-related services. The changes take effect in January.
They reflect a broader policy pivot, as a rapidly aging China shifts from limiting births to encouraging people to have more children. The population has shrunk for three consecutive years, with just 9.54 million births in 2024 — barely half of the 18.8 million registered nearly a decade ago, when the one-child policy was lifted.
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Typical authoritarian mindset: try to force what you want people to do instead of finding out why they don’t want to and addressing the actual problems. They could impose a VAT of 100%, and it’ll still be cheaper and easier than having an actual child - especially in a culture known for its 996 work schedule.