China Introduces Contraception Tax Amid Falling Birth Rates

China’s struggle with declining birth rates has taken another unexpected turn, sparking debate both inside and outside the country.

As part of broader demographic and fiscal reforms, the Chinese government has reportedly introduced a 13 percent sales tax on contraceptive products starting January 1, while exempting childcare-related services from similar levies.

The move comes as China’s population continues to shrink for the third consecutive year.

According to official estimates cited by BBC News, only 9.54 million babies were born in 2024, roughly half the number recorded a decade earlier.

What changed

For more than thirty years, contraceptives in China were exempt from value-added tax. The exemption dates back to 1994, when the country began strict enforcement of its one-child policy.

Under the revised tax framework announced in late 2025, those long-standing exemptions have been removed. Contraceptives are now subject to a 13 percent VAT, while marriage-related expenses, childcare services, and senior care remain tax-free.

Authorities say the restructuring is part of a wider effort to modernise the tax system and adjust social incentives.

A broader policy push

The China contraception tax is not the only measure introduced in response to falling birth rates.

In recent years, authorities have also rolled out:

• Cash incentives for families

• Extended parental leave policies

• Expanded childcare support programs

Despite these efforts, birth numbers have continued to decline, raising questions about whether financial measures alone can reverse the trend.

Public reaction and criticism

The decision to tax contraception has triggered widespread discussion online, with many users questioning its logic and effectiveness.

Daniel Luo, a 36-year-old resident of Henan province with one child, told the BBC that higher costs would not influence family planning decisions.

“Raising the levy on contraception won’t result in more children,” he said.
“It’s like when subway fares increase. When they go up by a yuan or two, people who take the subway don’t change their habits. You still have to take the subway, right?”

Concerns about unintended consequences

Others worry that the China contraception tax could lead to unintended social risks.

Rosy Zhao, who lives in the central city of Xi’an, warned that increased costs could push students or low-income individuals to take greater risks.

She described this as “the policy’s most dangerous potential outcome,” highlighting concerns that pricing changes could affect behaviour in ways policymakers did not anticipate.

Questions about the real motive

Some experts have questioned whether the tax is truly aimed at boosting birth rates.

Demographer Yi Fuxian suggested that the policy may be driven more by fiscal pressure than demographic strategy, pointing to rising government debt and a prolonged downturn in China’s real estate sector.

According to this view, the removal of long-standing tax exemptions could be part of a broader effort to increase revenue rather than directly influence reproductive decisions.