Beginning in January 2026, China will reintroduce taxation on contraceptive products for the first time in over three decades, marking a dramatic policy shift aimed at increasing birth rates. Under the revised Value-Added Tax Law, all contraceptive items — including condoms — will be subject to a 13 per cent levy. Since 1993, such products have been exempt from VAT, reflecting Beijing’s earlier push for strict population control under the one-child policy that lasted from 1980 to 2015.
The reported tax proposal has not yet been officially confirmed by the government, but it aligns with a broad set of pro-natalist measures introduced in recent years as China struggles with a rapidly shrinking workforce and declining fertility. Provincial authorities have rolled out incentives such as cash rewards for newborns, longer parental leave, and discouragement of abortions deemed non-essential in an effort to lift birth numbers.
China’s demographic downturn continues to deepen. According to the National Bureau of Statistics, the country’s population dropped for the third straight year in 2024, falling by 1.39 million to 1.408 billion. Although births increased slightly to 9.54 million, the birth rate remains one of the lowest in the world. Long-term projections add urgency to the situation: the United Nations estimates that the number of Chinese women of reproductive age could fall by more than two-thirds to below 100 million by the end of the century.
The decision to tax contraceptives, reversing decades of support for birth control, highlights how dramatically China’s priorities have shifted — from controlling population growth to struggling to restart it. Whether the new levy will meaningfully influence birth rates remains uncertain, but it underscores the scale of Beijing’s concern over its demographic crisis.
