Condoms Tax and Tax Overhaul Aim to Reverse China's Plummeting Birth Rate
China will slap a new tax on condoms while cutting childcare costs from January 1 in a fresh bid to reverse its plunging birth rate after decades of enforcing the one-child policy. Condoms and contraceptive pills will now be subject to a 13 percent value-added tax (VAT), the standard rate applied to most consumer goods. The move comes as Beijing struggles to boost births in the world's second-largest economy, with China's population shrinking for a third consecutive year in 2024. Experts have warned the demographic downturn is set to continue. The tax change is part of a sweeping overhaul of China's tax system announced late last year, which removes many exemptions that had been in place since 1994 — when the country was still enforcing its decades-long one-child rule. At the same time, authorities have exempted childcare subsidies from personal income tax and rolled out an annual childcare allowance, as part of a series of so-called 'fertility-friendly' measures introduced in 2024. Those measures have also included urging colleges and universities to offer 'love education' to promote marriage, fertility and family life in a positive light. Under the overhaul, marriage-related services and elderly care have also been exempted from value-added tax, alongside broader efforts such as extending parental leave and issuing cash handouts.
Public Reaction and Broader Fertility Measures Amid China's Population Decline
China's top leaders last month renewed pledges at the annual Central Economic Work Conference to foster 'positive marriage and childbearing attitudes' in an attempt to stabilise birth rates. Births in China have been falling for decades, driven by the one-child policy—enforced from 1980 to 2015—as well as rapid urbanisation. High childcare and education costs, job insecurity and a slowing economy have further discouraged young Chinese from marrying and starting families. Official figures show China's population has declined for three consecutive years, with just 9.54 million babies born in 2024—roughly half the number recorded a decade ago, when Beijing began easing restrictions on family size. But the decision to tax contraceptives—including condoms, birth control pills and devices—has sparked public concern about unwanted pregnancies and rising HIV rates, as well as widespread ridicule online. Some critics say it would take far more than higher condom prices to convince them to have children. 'I'll buy a lifetime's worth of condoms now.' 'People can tell the difference between the price of a condom and the cost of raising a child,' another wrote. China is among the most expensive countries in the world in which to raise a child, according to a 2024 report by the YuWa Population Research Institute in Beijing. The study said costs are driven up by school fees in an intensely competitive education system, as well as the difficulty women face balancing work and parenting.
