China has introduced a 13 per cent tax on condoms, contraceptive drugs, and related devices as part of efforts to reverse the country’s declining birth rate. The new tax, which took effect on January 1, ends over 30 years of tax exemptions on these products.
The decision comes as China records its third consecutive year of population decline since 2024, raising concerns about the long term impact on economic growth and workforce sustainability.
After decades of enforcing the one child policy between 1980 and 2015, Chinese authorities have now shifted focus to encouraging childbirth. The government has rolled out several incentives, including a 90 billion yuan childcare subsidy programme and an annual allowance of 3,600 yuan for every child under the age of three starting in 2025.
In addition, childbirth related expenses will now be covered under the country’s healthcare insurance scheme as part of broader efforts to ease the financial burden on families.
