China to tax contraceptives in desperate effort to boost birth rates

China has chosen to place a tax on condoms and contraceptives in an effort to boost its falling birth rate.

Key Takeaways:

• Starting in January, a 13% value-added tax (VAT) will be added on condoms and other contraceptives in China.

• This is a drastic reversal from previous policy, in which contraceptives were encouraged so as to limit childbirth.

• China has struggled with falling birth rates leading to population collapse, largely due to its disastrous and inhumane One-Child Policy, which was in place for nearly four decades.

The Details:

In a historic decision indicating the end of a decades-long promotion of contraception, China will enforce a 13% value-added tax (VAT) on condoms and other contraceptives. This new policy will take effect in January 2026, ending a 30-year exemption originally put in place to encourage the nation's One-Child Policy.

This policy shift, part of an amended VAT law, hopes to increase falling birth rates amid a demographic crisis, while providing tax breaks for childcare and marriage services to boost family growth. 

Notably, the tax targets contraceptive drugs and devices that enjoyed a tax-exempt status since 1993, when Beijing vigorously tried to enforce strict birth control through forced abortions, sterilizations, and subsidies under its draconian One-Child Policy, which was in place from 1979 to 2015.

Currently, however, with birth rates plunging to record lows of 6.77 per 1,000 people in 2024 and a population that is declining for the third straight year to 1.408 billion, China is adopting more pro-natalist measures.  

According to Euronews: 

The legislation, approved in late December 2024, sets out a revised list of tax-exempt goods and services, which cover areas such as agriculture, medical treatments, and cultural activities — but it notably omits birth control products such as condoms. These items will now be subject to a 13% levy, signaling a policy U-turn after years of strict family planning laws in China, designed to limit population growth.

Newsweek likewise described other initiatives the Chinese government has embraced to boost the country’s birth rates:

New incentives for prospective parents set to take effect in January include exempting tax from childcare services, elder care institutions, disability service providers and marriage-related services. Faced with an aging and declining population, Beijing has offered cash handouts, improved childcare services, and extended paternity and maternity leave. There are also new rules to reduce abortions that are not deemed ‘medically necessary’, a reversal of the country's coercive reproductive controls during the one-child era.

Why China's One-Child Policy is a tragedy like no other | DOCUMENTARY DEEP DIVE

The Big Picture:

The new law would also exempt nurseries, kindergartens, eldercare, disability services, and marriage-related businesses from VAT, thus alleviating childcare burdens and facilitating stable unions crucial for child-rearing. Other incentives to raise birth rates entail cash handouts, more maternity and paternity leave, enhanced childcare, and guidelines to limit abortions not classified as "medically necessary" (though it is not medically necessary to intentionally and directly kill preborn children). 

In response to the upcoming new tax, He Yafu, a demographer with the YuWa Population Research Institute in Beijing, remarked that such a move would unlikely be highly impactful, though the decision to tax condoms and contraceptives mirror the government’s attempt to influence its citizens to have more children and curb abortions. 

“Removing the VAT exemption is largely symbolic and unlikely to have much impact on the bigger picture,” He said. 

Moreover, the YuWa Population Research Institute estimates that raising a child to age 18 in China would cost parents the equivalent of $76,000 USD. Young adults tackling bleak job prospects and a stagnant economy may also choose to opt for career security and self-development over raising children.

Furthermore, conceding the gravity of China’s demographic crisis, The Independent reported,

China’s declining birth rate has led to a significant drop in both kindergarten numbers and enrollment, a new report has revealed. Because of the declining birthrate, in 2023, the number of kindergartens decreased by over five per cent, with 14,808 closures, marking the second year of decline, according to an annual report by China’s ministry of education.

The Bottom Line:

China’s move away from promoting and perpetrating death upon preborn children is a positive one, as safeguarding children in the womb supports societal thriving. The communist nation’s coercive One-Child Policy claimed tens of millions of lives, leaving a "demographic time bomb" of declining families with few or no children.

However, nearly 40 years of one-child propaganda is not easily undone. The Chinese government has a long way to go to reinforce the reality that children are valuable assets to a country’s future.