China ends a 30-year tax exemption on condoms and contraceptive pills, imposing a 13% VAT as part of efforts to reverse a declining population trend.
HONG KONG: China has removed a long-standing tax exemption on contraceptive drugs and devices in its latest attempt to address a declining birth rate.
Effective from January 1, condoms and contraceptive pills now incur a 13% value-added tax, the standard rate for most consumer goods.
The move ends a three-decade-old policy as Beijing struggles to boost population growth in the world’s second-largest economy.
China’s population fell for a third consecutive year in 2024, with experts cautioning the downturn will continue.
This follows a series of “fertility-friendly” measures introduced last year, including tax exemptions for childcare subsidies and the rollout of an annual childcare allowance.
Authorities also urged colleges to provide “love education” to portray marriage and family life positively.
Top leaders reiterated their commitment last month to promote “positive marriage and childbearing attitudes” to stabilise birth rates.
The decline is a legacy of the one-child policy enforced from 1980 to 2015, coupled with rapid urbanisation.
High costs for childcare and education, alongside job uncertainty and a slowing economy, have further discouraged young Chinese from starting families.
