Kathmandu | In a significant policy shift aimed at addressing its demographic crisis, the Chinese government has officially ended a three-decade-old tax exemption on contraceptives. Starting January 1, 2026, a 13% Value-Added Tax (VAT) has been applied to items such as condoms and birth control pills, which had been tax-free since 1993 to support the country’s former family planning and one-child policies. This move comes as China grapples with a shrinking population that has declined for three consecutive years, reaching a record low birth rate in 2024. By making contraceptives more expensive, authorities hope to indirectly encourage family formation, aligning the tax code with the nation’s current “three-child policy” and broader efforts to stabilize the workforce and support an aging society.
Beyond taxing birth control, Beijing is rolling out a “carrot-and-stick” approach by introducing several pro-birth incentives to make parenting more affordable. While contraceptives now face standard consumer taxes, the government has exempted childcare services, marriage-related services, and elderly care from VAT. Additionally, new measures include personal income tax deductions for childcare expenses and the introduction of “love education” programs in universities to foster positive attitudes toward marriage and family life among the youth. However, the “condom tax” has sparked widespread debate on social media, with critics and public health experts warning that higher costs could lead to an increase in unintended pregnancies and a rise in sexually transmitted infections (STIs) without necessarily convincing skeptical young couples to have more children. Despite these aggressive state interventions, economic challenges such as high living costs and job uncertainty remain the primary barriers preventing many in the world’s second-largest economy from starting larger families.
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