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China has removed a three-decade-old tax exemption on contraceptive drugs and devices in a bid to spur the nation’s flagging birth rate.
From 1 January, condoms and contraceptive pills incur a value-added tax of 13 per cent, the standard rate for most consumer goods in the country.
The move comes as China struggles to boost birth rates in the world’s second-largest economy.
China’s population fell for a third consecutive year in 2024 and experts have cautioned the downturn will continue.
In an effort to bolster its population growth, China has introduced significant policy changes, including exempting childcare subsidies from personal income tax. Last year, the government also launched an annual childcare subsidy as part of a broader initiative aimed at promoting higher birth rates. Looking ahead to 2024, China’s strategy includes encouraging higher education institutions to incorporate “love education” into their curricula. This initiative seeks to positively shape perceptions of marriage, love, fertility, and family life among young adults.
Top leaders again pledged last month at the annual Central Economic Work Conference to promote “positive marriage and childbearing attitudes” to stabilise birth rates.
China’s birth rates have been falling for decades as a result of rapid urbanisation and the one-child policy China implemented from 1980 to 2015.
The high cost of child care and education, as well as job uncertainty and a slowing economy, have also discouraged many young Chinese from getting married and starting a family.
