TL;DR
China will remove a decades-old VAT exemption on birth-control products and impose a 13% value-added tax on various contraceptives starting Jan. 1, 2026. Officials cast the move as part of efforts to address a falling birth rate and an aging population, though experts say the change is unlikely to substantially raise fertility rates.
What happened
Chinese authorities have amended the Value Added Tax Law to strip a tax exemption on contraceptives that had been in place since 1993. From January 1, 2026, a 13 percent VAT will be applied to a range of birth-control products, explicitly including condoms. The original exemption was introduced amid an earlier government push to limit population growth; officials now argue the measure no longer suits the country’s demographic challenges. The announcement comes as China records historically low birth rates and a shrinking population: 2024 saw about 9.54 million births and a national birth rate of 6.77 per 1,000 people, while total population fell year-on-year. Analysts and demographers cited in reporting view the tax change as largely symbolic and doubt it will reverse entrenched low fertility trends.
Why it matters
- The tax reversal signals a major policy shift from population control to efforts aimed at increasing births.
- Imposing VAT on contraceptives may affect access and cost, with potential public-health and market consequences.
- Demographic decline and an aging population are linked to slower potential economic growth, which policymakers are trying to address.
- The measure reflects broader government attempts since 2021 to encourage larger families through subsidies, extended leave and expanded childcare support.
Key facts
- The VAT exemption for contraceptives dated back to 1993 and is being removed under an amendment to the Value Added Tax Law.
- A 13% value-added tax on various contraceptives, including condoms, takes effect on January 1, 2026.
- China recorded roughly 9.54 million births in 2024, about 520,000 more than in 2023, while the 2024 birth rate was 6.77 per 1,000.
- China’s total population in 2024 was reported at just over 1.408 billion, a decline of about 1.39 million from the prior year.
- India surpassed China as the world’s most populous country in April 2023, according to the reporting.
- Oxford Economics warned that a shrinking labor force and slower productivity growth could push potential output growth below 4% in the 2030s.
- Since 2021, Chinese policy measures to boost births have included subsidies for families with three children, expanded childcare, and longer parental leave, and authorities have discouraged some abortions by labeling them nonessential.
- Demographer He Yafu told Bloomberg that removing the VAT exemption is likely symbolic and unlikely to have a major nationwide effect.
- A 2024 analysis by the YuWa Population Research Institute estimated the cost of raising a child to age 18 at about 538,000 yen (around $76,000), as reported.
What to watch next
- Whether the VAT change leads to measurable shifts in contraceptive purchases or use — not confirmed in the source.
- Public response and any political or social backlash to adding tax on birth-control products — not confirmed in the source.
- If the government introduces complementary measures to offset cost increases (subsidies, exemptions) after the VAT goes into effect — not confirmed in the source.
Quick glossary
- Value-Added Tax (VAT): A consumption tax levied at each stage of production or distribution, typically charged as a percentage of a product’s price.
- Birth rate: The number of live births per 1,000 people in a given year; a common demographic indicator of fertility.
- Potential output growth: An estimate of the maximum sustainable increase in an economy’s output without triggering inflation, influenced by labor supply and productivity.
- Contraceptive: A product or method used to prevent pregnancy, including barrier methods (like condoms), hormonal options, and devices.
- Demographer: A specialist who studies population dynamics such as birth rates, death rates, migration, and aging trends.
Reader FAQ
Why is China adding VAT to contraceptives?
Officials said the tax change is part of policy shifts responding to low birth rates and an aging population; the exemption from 1993 was designed for a different demographic context.
When does the new tax take effect?
The 13% VAT on various contraceptives starts January 1, 2026.
Which contraceptives are affected?
The reporting says multiple contraceptives will be subject to the VAT and explicitly mentions condoms.
Will this tax increase births?
Demographers cited in the reporting consider the move largely symbolic and unlikely to produce a significant nationwide increase in fertility.
FERNANDA GONZÁLEZ POLICY DEC 30, 2025 5:30 AM China Will Tax Contraceptives in a Bid to Improve Birth Rates Amid historically low birth rates and economic pressures from its aging…
Sources
- China Will Tax Contraceptives in a Bid to Improve Birth Rates
- The end of a tax break for condoms in China sparks health …
- China to hike tax on condoms in attempt to boost falling …
- China ends tax exemption for condoms as birth rate falls
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