China will begin charging a 13% value added tax on contraceptives from 1 January, while exempting childcare, marriage-related services, and elderly care from VAT, as authorities adjust fiscal policy alongside broader efforts to address declining birth rates.
Tax Overhaul Linked To Population Concerns
The changes are part of a wider overhaul of the tax system announced late last year, which removes many exemptions that had been in place since 1994. At that time, China was enforcing its one-child policy, which remained in effect for decades before being gradually relaxed.
The revised VAT framework comes as the government faces an ageing population, falling birth rates, and slower economic growth. Official data shows that China’s population has declined for three consecutive years. In 2024, 9.54 million babies were born, roughly half the number recorded a decade earlier, when restrictions on family size were first loosened.
Scope Of Goods And Services Affected
Under the updated rules, contraceptives such as condoms, birth control pills, and related devices will be subject to VAT. At the same time, childcare services, marriage-related services, and elderly care will be exempt from the tax. The measures accompany other policy steps, including extended parental leave and cash subsidies aimed at encouraging marriage and childbearing.
Public Reaction And Social Media Response
The decision to tax contraceptives has drawn mixed reactions online, ranging from concern to ridicule. Some users expressed worries about unwanted pregnancies and HIV transmission, while others questioned whether higher prices for contraception would influence decisions about having children.
Retailers in some areas urged customers to stock up before prices rise. One social media user joked about buying a lifetime supply of condoms, while another wrote that people can clearly distinguish between the cost of contraception and the cost of raising a child.
Cost Of Raising Children And Economic Pressure
A 2024 report by the YuWa Population Research Institute described China as one of the most expensive countries in which to raise a child. The report cited high education costs in a competitive academic system and the difficulty many women face balancing work and parenting responsibilities.
Economic uncertainty has added to these pressures. A prolonged property market downturn has affected household savings, contributing to reduced confidence among families, particularly younger people.
Individual Views On The Tax Change
Daniel Luo, a 36-year-old resident of Henan province, said the higher price of condoms would not affect his decisions. He said the added cost would amount to only a few hundred yuan per year, which he described as affordable. Luo, who has one child, said he does not plan to have more.
By contrast, Rosy Zhao, who lives in Xi’an, said higher prices for contraception could lead students or people facing financial hardship to take risks. She said the possibility of reduced access to contraception was the most concerning outcome of the policy.
Expert Perspectives On Policy Intent
Demographer Yi Fuxian said the idea that taxing condoms would influence birth rates may be overstated. He said the government may be seeking additional tax revenue as it deals with a housing slowdown and rising national debt.
China’s VAT revenue reached nearly $1 trillion last year, accounting for close to 40% of total tax collection.
Henrietta Levin of the Center for Strategic and International Studies described the tax on contraceptives as symbolic, reflecting attempts to address what she called very low fertility levels. She added that many supporting policies rely on provincial governments, some of which are already heavily indebted, raising questions about their ability to fund incentives effectively.
Concerns About Government Involvement
Levin also said policies encouraging childbirth risk backfiring if people feel state involvement has become intrusive. Recent media reports said women in some provinces received calls from local officials asking about menstrual cycles and pregnancy plans. Health authorities in Yunnan province said the information was needed to identify expectant mothers.
According to Levin, such actions may harm public trust, particularly when policies touch on personal decisions.
Broader Social Shifts And Regional Context
Observers and some women have said the country’s male-dominated leadership struggles to address underlying social changes, including declining marriage rates and reduced interest in dating. Similar demographic challenges are affecting other countries, including South Korea and Japan, as populations age.
Research shows childcare responsibilities continue to fall more heavily on women, while shifts in social behavior also play a role.
Luo said policies overlook changes in how young people relate to one another. He pointed to rising sales of sex toys as an indicator that some people prefer avoiding relationships due to stress and social pressure. He said online interactions feel easier and less demanding, while expectations placed on younger generations remain high.
Featured image credits: Freepik
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