China has introduced a new tax on contraceptives while exempting childcare services from value-added tax (VAT), as part of broader efforts to address the country’s declining birth rate.
According to BBC News, the policy, which took effect on January 1, 2026, imposes a 13 per cent VAT on contraceptives that had been tax-exempt for more than three decades. The exemption was first introduced in 1994, during the height of China’s one-child policy.
The revised tax framework was announced in late 2025 and also includes VAT relief for childcare services, elderly care and certain marriage-related expenses. Authorities say the changes are designed to ease the financial burden on families and encourage higher birth rates.
Official data show that China’s population has declined for the third consecutive year, with 9.54 million babies born in 2024 — about half the number recorded ten years earlier. In addition to tax adjustments, the government has rolled out longer parental leave and financial incentives for families.
However, the decision to tax contraceptives has triggered widespread debate online, with critics questioning its effectiveness. Daniel Luo, a 36-year-old father of one from Henan province, said higher contraceptive costs are unlikely to influence family planning decisions.
“People don’t stop using something essential just because it becomes slightly more expensive,” he told the BBC.
Others have raised concerns about possible unintended consequences. Rosy Zhao, who lives in the central city of Xi’an, warned that higher costs could push students and low-income individuals toward risky behaviour.
“This could be the most dangerous outcome of the policy,” she said.
Some analysts have also questioned whether boosting birth rates is the primary motivation behind the move. Demographer Yi Fuxian suggested the government may be seeking additional revenue as it faces rising debt levels and ongoing challenges in the property sector.
The policy has added to an already complex debate over how China can reverse its demographic decline amid economic and social pressures.