China Imposes Sales Tax on Contraceptives Amidst Efforts to Boost Birth Rates.
Beginning January 1st, individuals in China will face a 13% sales tax on contraceptives, while childcare services will be exempt, as the nation grapples with declining birth rates and seeks to stimulate population growth.
The tax system overhaul, announced in late 2023, rescinds numerous exemptions in place since 1994, a period when China was still enforcing its one-child policy.
Marriage-related services and elderly care will also be exempt from value-added tax (VAT), as part of a comprehensive strategy that includes extended parental leave and financial incentives.
Faced with an aging demographic and a slowing economy, Beijing has intensified efforts to encourage marriage and childbearing among young Chinese couples.
Official data reveals that China’s population has contracted for three consecutive years, with only 9.54 million births recorded in 2024, approximately half the number of births recorded a decade prior, when the government began easing restrictions on family size.
The imposition of a tax on contraceptives, including condoms, birth control pills, and devices, has drawn criticism, raising concerns about potential increases in unwanted pregnancies and HIV rates. Critics also suggest that the cost of contraceptives is unlikely to be a decisive factor in family planning decisions.
Ahead of the price increase, one retailer urged shoppers to stock up, prompting a social media user to joke, “I’ll buy a lifetime’s worth of condoms now.”
Another user wrote, “People can tell the difference between the price of a condom and that of raising a child.”
According to a 2024 report by the YuWa Population Research Institute in Beijing, China is among the most expensive countries in the world to raise a child. High school fees and the difficulties women face balancing work and family contribute to the high cost.
The economic slowdown, exacerbated by a property crisis that has eroded savings, has created uncertainty and diminished confidence in the future among families, particularly young people.
“I have one child, and I don’t want any more,” said Daniel Luo, 36, a resident of Henan province.
He draws a parallel to rising subway fares: “When they go up by a yuan or two, people who take the subway don’t change their habits. You still have to take the subway, right?”
He is unconcerned about the price increase. “A box of condoms might cost an extra five yuan, maybe 10, at most 20. Over a year, that’s just a few hundred yuan, completely affordable.”
However, Rosy Zhao, who lives in Xi’an, fears that the cost might be a barrier for others.
She believes that making contraception, a necessity, more expensive could lead students or those facing financial difficulties to “take a risk.”
She warns that this could be the policy’s “most dangerous potential outcome.”
Experts are divided on the tax overhaul’s true aim. Demographer Yi Fuxian of the University of Wisconsin-Madison, believes that linking a tax hike on condoms to birth rates is “overthinking it.”
He suggests Beijing is eager to collect taxes “wherever it can” as it contends with a housing market downturn and growing national debt.
At nearly $1 trillion (£742 billion), China’s VAT revenue represented almost 40% of the country’s tax collection last year.
Henrietta Levin of the Center for Strategic and International Studies views the tax on condoms as “symbolic,” reflecting Beijing’s attempts to address China’s “strikingly low” fertility rates.
She further notes that the implementation of many policies and subsidies will depend on indebted provincial governments, raising questions about their ability to allocate sufficient resources.
Levin also suggests that China’s approach to encouraging childbirth risks alienating the population if individuals perceive the government as being “too intrusive” in deeply personal decisions.
Recent media reports indicate that local officials in some provinces have contacted women to inquire about their menstrual cycles and family planning. According to the Yunnan province’s local health bureau, this data is needed to identify expectant mothers.
Levin believes that these actions have been detrimental to the government’s public image. “The [Communist] party can’t help but insert itself into every decision that it cares about. So it ends up being its own worst enemy in some ways.”
Observers, including women, contend that the country’s male-dominated leadership fails to grasp the underlying social changes, which are not unique to China.
Western nations, along with countries in the region like South Korea and Japan, have been struggling to increase birth rates in the face of aging populations.
Research indicates that the disproportionate burden of childcare on women is one factor, along with declining marriage and dating rates.
Luo from Henan argues that China’s measures overlook the fundamental issue: the way young people interact today, which increasingly avoids authentic human connections.
He points to the increasing sales of sex toys in China, which he sees as an indication that “people are just satisfying themselves” because “interacting with another person has become more of a burden.”
He says that being online is easier and more comforting because “the pressure is real.”
“Young people today deal with way more stress from society than people did 20 years ago. Sure, materially they’re better off, but the expectations placed on them are much higher. Everyone’s just exhausted.”
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