China contraceptives VAT: China will begin charging value-added tax (VAT) on condoms and other contraceptives from January 1, ending a tax exemption that has been in place since the country rolled out a nationwide VAT system in 1993.
Under the change, condoms and contraceptives will fall under a 13% VAT rate. The move is part of a broader VAT law passed in 2024 aimed at updating China’s tax framework. VAT is a major pillar of state finances, making up close to 40% of the country’s overall tax revenue.
The timing, however, has drawn attention because it comes as Beijing tries to reverse a long-running decline in births. After decades of the one-child policy, China has shifted to policies designed to encourage larger families, including raising the child limit to three and rolling out local incentives such as fertility-treatment support, cash benefits for additional children, and extra leave for newly married couples.
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Online, many users reacted with mockery, arguing that making contraception more expensive clashes with efforts to promote family-friendly policy. Some posts suggested the change felt less like tax reform and more like pressure to have children.
The same VAT law includes tax breaks linked to childcare and “marriage introduction services.” This year, authorities also set aside 90 billion yuan for a nationwide childcare subsidy, offering 3,600 yuan per year for each child under three. The government has also said it plans to expand public health insurance coverage to include childbirth-related costs.
Despite these measures, births remain low. China’s birthrate in 2024 was 6.77 per 1,000 people, slightly higher than the year before but still far below past levels. With deaths rising as the population ages, China’s overall population has continued to shrink for at least three years.
The VAT decision has also added to debate about whether officials may increasingly rely on stricter measures rather than incentives. In recent months, some women have reported being contacted by local officials about menstrual cycles and childbearing plans. Chinese media have also described cases where local authorities asked women to report the date of their last period, with local health officials saying the data collection was meant to identify pregnant and expectant mothers.
Experts said the tax itself is unlikely to change behaviour in a meaningful way. Condoms typically sell for 40–60 yuan per pack, while over-the-counter contraceptive pills often cost 50–130 yuan for a month’s supply. Some analysts described the VAT shift as more symbolic than practical, signalling a change in policy priorities, while warning that any reduced access to contraception would disproportionately affect women, especially those with fewer resources.
Revenue gains from the measure are also expected to be limited. One estimate put additional annual VAT intake from contraceptives at around 5 billion yuan, a small fraction of China’s roughly 22 trillion yuan public budget revenue, suggesting the change is not primarily about raising funds.
