Why Is China Taxing Condoms, Birth Control Pills Now? Policy Shift Explained

China has begun imposing a 13 percent sales tax on contraceptives such as condoms, birth control pills, and devices from January 1, 2026, while exempting childcare services from value-added tax (VAT).

The shift is part of a broader tax overhaul announced in late 2025, doing away with exemptions that existed since 1994, a period when China was still strictly enforcing its decades-long one-child policy, reported BBC. 

The revised tax structure also exempts marriage-related services and elderly care from VAT, aligning with wider efforts to encourage family formation.

Read | Risk Of STDs, Unplanned Pregnancies As China Imposes Tax On Condoms

What Prompted China To Abandon The One-Child Policy?

January 1, 2026, marks a decade since China formally scrapped its “one-child” policy. The rule, officially enacted in 1980, was designed to curb population growth that authorities feared could undermine efforts to lift the country out of poverty.

For decades, the policy was enforced through a vast and often brutal state apparatus that used propaganda, harassment, heavy fines and, in some cases, forced abortions and sterilisations to suppress what were deemed excess births. 

But the government eventually acknowledged that a falling birth rate posed a serious threat to economic growth, prompting the policy's repeal in 2016, reported CNN.

Why Haven't Pro-Birth Policies Worked So Far?

Despite introducing incentives to encourage larger families, China's population has continued to shrink. According to Reuters, China's population declined for a third consecutive year in 2024, with experts warning that the downturn is likely to continue. China is also grappling with rapid ageing. 

According to CNN, people aged over 60 now account for more than 20 percent of the population of 1.4 billion. United Nations projections suggest this figure could rise to nearly half by 2100.

Read | Why is China Making Condoms Expensive? 13% VAT Imposed On Contraceptives

What Makes Raising Children So Difficult In China?

High costs remain a major deterrent. China is among the most expensive countries in the world in which to raise a child, according to a 2024 report by the YuWa Population Research Institute in Beijing, reported BBC. Expenses are driven up by school fees. Economic uncertainty has compounded the problem.

A prolonged slowdown, partly triggered by a property crisis that has eroded household savings, has left many families feeling insecure about their future. Beyond finances, boosting birth rates also require addressing issues such as high youth unemployment and the disproportionate burden of childcare placed on women.

Is China's New Approach Raising Concerns?

The decision to tax contraceptives has drawn criticism and ridicule. As per reports, it could increase the risk of unwanted pregnancies and HIV. Many also say that higher condom prices are not likely to persuade reluctant couples to have children.

Local governments have rolled out a range of incentives in recent years, including tax breaks, housing support, cash handouts and extended maternity leave. But reports of women receiving calls from community workers asking about their plans to have children have sparked concern that pro-natalist policies could become coercive, reported CNN.

According to Reuters, while Beijing has now pivoted towards promoting marriage and childbirth, the effectiveness of this dramatic reversal remains uncertain.