China imposes tax on condoms in bid to boost birth rates

China will impose a value-added tax on contraceptive drugs and devices - including condoms - for the first time in three decades, its latest bid to reverse plunging birth rates that threaten to further slow its economy.

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Under the newly revised Value-Added Tax (VAT) Law, consumers will pay a 13 per cent levy on items that had been VAT-exempt since 1993, when China enforced a strict one-child policy and actively promoted birth control.

At the same time, the revision carves out new incentives for prospective parents by exempting childcare services - from nurseries to kindergartens - as well as eldercare institutions, disability service providers and marriage-related services. The changes take effect in January.

They reflect a broader policy pivot, as a rapidly ageing China shifts from limiting births to encouraging people to have more children. The population has shrunk for three consecutive years, with just 9.54 million births in 2024 - barely half of the 18.8 million registered nearly a decade ago, when the one child policy was lifted.