In a significant shift, China will begin applying a 13% Value-Added Tax to condoms and other contraceptives starting January 1st. The move ends a three-decade-long exemption and forms part of a broader strategy to address the nation’s persistently low birth rate.
The tax provision was included in a comprehensive VAT law passed last year, aimed at modernizing the country’s fiscal system. The decision marks a clear policy pivot for a government that once strictly limited family size. For decades, China enforced a one-child policy, but has spent the last ten years reversing course, implementing various incentives to encourage larger families. These have included raising the child limit to three, offering subsidies for in-vitro fertilization, and providing cash bonuses and extended parental leave in some regions.
The new tax on contraceptives has sparked considerable public debate online, with many citizens questioning the logic of making family planning tools more expensive. Critics argue it represents a coercive turn in demographic policy. This sentiment has been amplified by recent reports from several localities, where authorities have begun collecting detailed personal data from women, including menstrual cycle information, ostensibly to better track pregnancies.
Demographic experts suggest the financial impact of the tax itself will be minimal. A standard box of condoms typically costs between 40 and 60 yuan; the new levy would add just a few yuan to the price. Analysts estimate the annual revenue from the tax will be around 5 billion yuan—a negligible sum within the context of China’s multi-trillion-yuan national budget. This indicates that the primary goal is symbolic, signaling the state’s prioritization of childbirth over contraception.
The policy shift occurs against a stark demographic backdrop. Although 2024 saw a minor uptick, China’s birth rate remains near historic lows at 6.77 births per 1,000 people. Coupled with a rising death rate from an aging population, the country’s overall population has been declining for three consecutive years. Despite substantial government spending on new childcare subsidies and expanded health insurance for childbirth, these incentives have yet to produce a significant reversal in the trend.
Observers note that while the tax is unlikely to deter determined couples, it sends a clear message about state-endorsed family planning. However, concerns are being raised about the potential disproportionate burden on women, particularly those from less advantaged backgrounds, should access to affordable contraception become more difficult.
Ultimately, the reintroduction of VAT on contraceptives is seen less as a revenue-raising measure and more as a statement of intent, underscoring the government’s escalating efforts to stimulate population growth through a combination of incentives and now, disincentives for contraception.