China slaps 13% tax on birth control—What’s behind Beijing’s new tax on condoms, contraceptives? | Explained | Today News

China has ended a tax exemption on contraceptive medicines and devices that had been in place for more than 30 years, effective January 1, as part of efforts to address its slowing birth rate, according to a report by Reuters.

As a result, condoms and birth control pills are now subject to a 13% value-added tax, the same rate applied to most consumer products.

The decision comes at a time when Beijing is grappling with persistently low birth rates in the world's second-largest economy. China's population declined for a third straight year in 2024, and experts have warned that the downward trend is likely to continue.

In response, authorities have introduced a range of measures aimed at encouraging childbirth, including exempting childcare subsidies from personal income tax and launching an annual childcare allowance last year. Other “fertility-friendly” steps rolled out in 2024 included calls for colleges and universities to offer “love education” that promotes positive views on marriage, relationships, childbearing, and family life, Reuters reported.

Top leaders again pledged last month at the annual Central Economic Work Conference to promote “positive marriage and childbearing attitudes” to stabilise birth rates.

After World War II and the Communist Party’s takeover in 1949, large families became common again, leading to the population doubling within three decades. This growth occurred despite the deaths of tens of millions during the Great Leap Forward, which aimed to transform agriculture and industry, and the Cultural Revolution that followed soon after.

Following the end of the Cultural Revolution and the death of Mao Zedong, Communist officials grew concerned that China’s population growth was exceeding the nation’s capacity to feed itself. In response, they introduced the harsh “one-child policy.”

Although it was never formally enacted into law, women were required to seek official approval to have a child, and those who violated the policy risked forced late-term abortions and sterilisations, steep financial penalties, and the denial of identification documents for their children—effectively rendering them without legal status, AP reported.

The government tried to curb the practice of selectively aborting female fetuses, but because abortions were legal and easily accessible, illegal operators running unauthorised sonogram services thrived. This contributed significantly to China’s skewed sex ratio, with millions more boys being born than girls, raising concerns about potential social instability among the country’s large population of unmarried men, AP reported.

China's total fertility rate rose slightly in 2022, increasing by 0.02 children per woman, or about 1.72 per cent, to reach 1.18 children per woman.

Already, more than one-fifth of the population is aged 60 or over, with the official figure given as 310.3 million or 22% of the total population.

By 2035, this number is forecast to exceed 30%, sparking discussion of changes to the official retirement age, which one of the lowest in the world. With fewer students, some vacant schools and kindergartens are meanwhile being transformed into care facilities for older people.