China will end a long-standing tax exemption for contraceptives, including condoms, introducing a value-added tax (VAT) of 13% starting on January 1, 2026. This decision marks a significant policy shift amid ongoing concerns about the country’s declining birth rate, which has raised alarms among government officials and demographers alike.
The change means that contraceptives will no longer be classified as tax-exempt goods, prompting discussions on social media regarding its implications. Many users expressed skepticism, with one commenter questioning “which expert” devised the policy, arguing that increased costs for contraception could interfere with couples’ private lives and potentially have long-term effects on relationships. Another user highlighted economic factors, stating that low incomes and limited vacation time are primary reasons for the country’s low birth rate.
China’s birth rate has been declining for several years. In response to a rapidly ageing population and a population decline initiated in recent years, the government has attempted to encourage higher birth rates. The country began to relax its strict one-child policy in the mid-2010s, first allowing two children in 2016 and then increasing the limit to three children in 2021. Despite these measures, including tax incentives, extended parental leave, and local subsidies, officials have struggled to convince citizens to have more children.
Analysts attribute the low birth rate to various challenges, including high living costs, expensive housing, and intense educational pressures faced by families. Many young couples cite financial insecurity as a significant deterrent to starting families. The introduction of VAT on contraceptives could exacerbate these concerns, as families may view the increased expense as an additional burden.
As China navigates these demographic challenges, the effectiveness of the new tax policy remains to be seen. The government’s attempts to incentivize childbearing have faced criticism, and it appears that economic factors may play a more critical role in influencing family planning decisions than policy changes alone.
