China taxes condoms, contraceptive drugs in bid to spur birth rate

The move comes as Beijing struggles to raise birth rates

An adult holding a baby walks at a store selling baby products in Shanghai, China Jun 1, 2021. REUTERS/Aly Song/File Photo

China removed a three-decade-old tax exemption on contraceptive drugs and devices from Jan 1 in new steps to spur a flagging birth rate.

Condoms and contraceptive pills now incur value-added tax of 13 percent, the standard rate for most consumer goods.

The move comes as Beijing struggles to boost birth rates in the world's second-largest economy. China's population fell for a third consecutive year in 2024 and experts have cautioned the downturn will continue.

China exempted childcare subsidies from personal income tax and rolled out an annual childcare subsidy last year, following a series of "fertility-friendly" measures in 2024, such as urging colleges and universities to provide "love education" to portray marriage, love, fertility and family in a positive light.

Top leaders again pledged last month at the annual Central Economic Work Conference to promote "positive marriage and childbearing attitudes" to stabilise birth rates.

China's birth rates have been falling for decades as a result of the one-child policy China implemented from 1980 to 2015, and rapid urbanisation.

The high cost of childcare and education as well as job uncertainty and a slowing economy have also discouraged many young Chinese from getting married and starting a family.