China has removed a long-standing tax exemption on contraceptive drugs and devices in a fresh attempt to reverse the country’s declining birth rate, as demographic pressures continue to mount in the world’s second-largest economy.
From January 1, condoms and contraceptive pills are subject to a 13 per cent value-added tax, the standard rate applied to most consumer goods. The exemption had been in place for more than three decades, reflecting earlier population-control priorities that have since shifted dramatically.
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The policy change comes as China struggles to encourage families to have more children. The country’s population declined for a third consecutive year in 2024, and demographers have warned that the downturn is likely to continue in the absence of more effective incentives.
#Gravitas | Beijing imposes a tax on condoms
People in China will now have to pay a 13% sales tax on contraceptives from 1 January, while childcare services will be exempt
The move has since drawn ridicule and criticism@MollyGambhir has more on this pic.twitter.com/6LFHUv1qIf
— WION (@WIONews) January 1, 2026
In recent years, Beijing has rolled out a range of measures aimed at promoting childbirth. These include exempting childcare subsidies from personal income tax and introducing an annual childcare subsidy, alongside broader efforts to frame marriage and parenthood more positively. In 2024, authorities urged universities and colleges to provide so-called “love education” to encourage favourable attitudes toward marriage, fertility and family life.
The issue was again highlighted last month at the Central Economic Work Conference, where senior leaders pledged to promote “positive marriage and childbearing attitudes” as part of efforts to stabilise population growth.
China’s demographic challenges stem in part from the legacy of the one-child policy, which was enforced between 1980 and 2015 and fundamentally reshaped family structures. Rapid urbanisation has further contributed to declining fertility rates, particularly in major cities.
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Rising living costs, expensive childcare and education, job insecurity and a slowing economy have also discouraged many young Chinese from marrying and starting families. While the latest tax move signals a clear policy shift, analysts say broader economic and social reforms may be necessary to significantly alter long-term demographic trends.