China is set to impose a value-added tax on condoms and other contraceptives for the first time in more than 30 years, as part of efforts to modernise its tax system and encourage higher birth rates.
From 1 January, condoms and contraceptives will be subject to a 13% VAT rate. The products have been exempt since China introduced a nationwide VAT system in 1993.
The change was included in a VAT law passed in 2024, aimed at updating China’s tax framework. VAT accounts for nearly 40% of the country’s total tax revenue.
After enforcing a strict one-child policy for more than three decades, China has spent the past 10 years introducing measures designed to encourage couples to have more children, as the birth rate continues to fall.
The government has raised the limit on the number of children per couple to three, while provincial authorities have offered incentives including cash subsidies, discounts on IVF treatment and additional paid leave for newly married couples.
The decision to tax condoms and contraceptives has drawn criticism and ridicule on social media, with users questioning why products designed to prevent pregnancy are being made more expensive as the government pushes for higher birth rates.
The new VAT law also includes tax breaks for childcare services and marriage introduction agencies.
Earlier this year, the government allocated 90bn yuan (£10bn) to its first nationwide childcare subsidy scheme, offering 3,600 yuan a year for each child under the age of three. At the weekend, authorities also announced plans to expand national health insurance to cover all childbirth-related costs.
Despite these measures, birth rates remain low. In 2024, China recorded 6.77 births per 1,000 people, a slight increase on the previous year but still well below historic levels. An ageing population and rising death rates mean the country’s population has been shrinking for at least three years.
Concerns have been raised that officials may be moving from incentives to more coercive measures. In some areas, women have reported receiving calls from local officials asking about their menstrual cycles and plans to have children.
In December, media reports said women in a county in Yunnan province were required to report the date of their last period to local authorities. The local health bureau said the information was needed to identify pregnant and expectant mothers.
Condoms currently cost about 40 to 60 yuan per packet, while a month’s supply of contraceptive pills costs between 50 and 130 yuan. Analysts say the new tax is unlikely to significantly affect consumer behaviour.
He Yafu, an independent demographer based in Guangdong, said that while it was logical to resume taxing contraceptives now that the government no longer promotes birth control, the policy was unlikely to have any meaningful impact on fertility rates.
Yun Zhou, an assistant professor of sociology at the University of Michigan, said the move was more symbolic than practical, signalling what the government considers desirable family behaviour. She warned that any reduction in access to contraception would disproportionately affect women, particularly those in disadvantaged groups.
The government says the VAT reform is part of a broader effort to place existing taxes on a legal footing rather than rely on administrative rules. However, analysts say the measure is unlikely to raise significant revenue.
Lee Ding, a manager at Dezan Shira & Associates, estimated that taxing contraceptives would raise about 5bn yuan a year, compared with China’s total public budget revenue of about 22tn yuan. He said revenue generation was unlikely to be the main motivation behind the policy.
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