China will, for the first time in 30 years, impose a value-added tax on contraceptives, including condoms, in a move aimed at addressing falling birth rates that could further slow economic growth.

Under the updated VAT law, consumers will face a 13 per cent tax on products that had been exempt since 1993, when China’s one-child policy was in force and birth control was heavily encouraged.

At the same time, the revision introduces new incentives for prospective parents, exempting childcare services, from nurseries to kindergartens, as well as eldercare facilities, disability services, and marriage-related services from VAT.
These changes will take effect in January.

These measures reflect a broader policy shift, as an ageing China moves from restricting births to encouraging larger families. The population has declined for three straight years, with just 9.54 million births in 2024—roughly half the 18.8 million recorded nearly a decade ago, when the one-child policy ended.

In response, Beijing has introduced a range of pro-natalist initiatives, including cash incentives, expanded childcare services, and longer maternity and paternity leave.

China’s efforts to boost its birth rate face a major challenge: raising children is among the most expensive in the world, according to a 2024 report by Beijing’s YuWa Population Research Institute.

“Removing the VAT exemption is largely symbolic and unlikely to have much impact on the bigger picture,” said Mr He Yafu, a demographer with YuWa. Instead, “it reflects an effort to shape a social environment that encourages childbirth and reduces abortions”.