To combat its declining birth rate, China will impose a 13% tax on contraceptives starting in 2026, reversing a decades-long exemption. This is part of a pro-natalist strategy that also includes tax breaks for family services.
China has introduced a surprising and controversial policy change in its effort to address one of the most pressing issues facing the world’s second-largest economy -- persistently declining birth rate.
Beginning January 1, 2026, Beijing ended a nearly three-decade tax exemption on condoms and other contraceptive products by imposing a 13 percent value-added tax (VAT) on these items. The move marks a significant reversal in demographic policy following decades of strict birth-control measures.
The tax exemption on contraceptives dates back to the early years of China’s one-child policy, when authorities actively promoted population control and widespread use of family planning products to limit births.
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With China now facing a rapidly ageing population and a shrinking workforce, policymakers have shifted toward pro-natalist strategies, hoping to encourage larger families. However, simply making contraceptives more expensive is seen by many experts as a largely symbolic gesture rather than an effective solution to deep-rooted demographic challenges.
Despite placing a VAT on condoms, birth control pills and other contraceptives, China is simultaneously offering tax exemptions for services intended to support family life, such as childcare, elder care, marriage-related services and disability support under its newly revised VAT law.
These incentives are part of a broader strategy that includes cash subsidies for newborns, expanded parental leave, and campaigns promoting positive attitudes toward marriage and childbearing.
Nonetheless, critics argue that the cost of raising a child, rather than minor price increases on contraceptives, is the primary deterrent for young couples. Raising a child in urban China remains prohibitively expensive, with schooling, housing and healthcare costs weighing on family decisions.
Demographers and social commentators widely believe that the condom tax will have minimal impact on fertility behaviour, as such price increases are negligible compared to lifelong child-rearing expenses.
Public reaction within China has been mixed, with some social media users mocking the idea of a condom tax as a birth-boosting measure. Critics warn that higher prices on contraceptives may even have unintended public health consequences if access becomes harder for low-income or young people.
China’s demographic situation remains serious -- the population has declined for several years, and recent data show record lows in birth figures even after a brief uptick in 2024. Without addressing broader socioeconomic pressures — such as high costs of living, job instability and changing social norms — policymakers may struggle to reverse the long-term decline in birth rates, despite well-intentioned but symbolic policies like the condom tax.
