China will enact a 13 per cent value-added tax (VAT) on condoms and other contraceptives from Jan. 1, 2026, when the country's new VAT law comes into effect.
Contraceptives have been exempted from VAT in China since 1993.
This new tax regime comes five years after China implemented the "three-child policy" in 2021, allowing couples to have up to three children.
Before the policy change, Chinese couples were only allowed to have one child between 1980 and 2015 and up to two children between 2016 and 2021.
Pro-birth
Speaking to Chinese media The Beijing News, an expert at the Beijing University of Chinese Medicine said that the new tax policy is in line with China's latest population strategy.
According to the expert, contraceptives were previously exempted from VAT to support China's family planning policies.
However, as the problems of negative population growth and an ageing population become increasingly acute in China, the country's strategy has shifted to promoting childbirth.
According to data released by China's National Bureau of Statistics, the country's birth rate has been declining continuously since 2017.
Over the last three years, the country's population growth rates also dropped below zero, meaning there were more deaths than births.
Screenshot from China's National Bureau of Statistics
Besides incentivising couples to start a family, the new tax regime will also generate additional revenue that can be used to support parents with childcare and their children's education, added the expert.
Carrot-and-stick approach
The imposition of VAT on contraceptives exemplified China's carrot-and-stick approach to boosting population growth in recent years.
In 2021, a Chinese county announced it would offer a cash reward of 1,000 yuan (S$183) to newlyweds if the bride was between 20 and 25 years old.
Earlier this year, the Chinese government introduced a nationwide childcare subsidy programme, offering families a yearly payment of 3,600 yuan (S$660) for every child under the age of three.
On Dec. 13, 2025, China's National Healthcare Security Administration also announced that the government will strive to cover all out-of-pocket expenses relating to childbirth in 2026, reported Nandu Daily.
Amongst the measures was full reimbursement of policy-covered medical expenses for childbirth nationwide.
The new tax regime also exempts childcare and matchmaking services from VAT.
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Top image via Xiaohongshu
