China Imposes 13% Condom Tax to Reverse Birth Rate Decline

China will impose a 13% sales tax on condoms and contraceptives starting January 1, 2026. This ends a 30-year tax exemption. The policy is a direct attempt to reverse the country’s declining birth rates.

According to Reuters, the move is part of a broader push to encourage more births. It comes alongside new family-friendly incentives announced by authorities.

Incentives and Economic Hurdles in Family Planning

The government is pairing the new China contraception tax with several benefits. These include longer maternity leave and proposed paid paternity leave. Tax breaks for childcare and elder care services are also part of the package.

Major cities like Beijing have already extended maternity leave. The goal is to reduce the financial burden on young families. However, significant economic barriers remain for many.

A tough job market and high child-rearing costs are powerful deterrents. Young adults are hesitant to start families despite the new incentives. This economic pressure continues to shape personal decisions.

From Strict Control to Active Encouragement

This shift marks a dramatic reversal from decades of strict population control. The infamous one-child policy was enforced for over 35 years. It ended only in 2016 after creating a severe demographic imbalance.

Penalties under the old policy were severe. They included heavy fines and forced medical procedures. The legacy is a rapidly ageing population and a shrinking workforce.

The government later allowed two and then three children per family. Yet, the national population has now fallen for three consecutive years. The new tax on birth control is the latest effort to counter this persistent decline.

The new China contraception tax signals a forceful, if controversial, attempt to reshape demographic trends. Its success will ultimately depend on whether financial incentives can outweigh the real costs of raising children in modern China.

A quick knowledge drop for you

What products will the new 13% tax apply to?

The tax will apply to condoms, birth control pills, and other contraceptive products. These items were previously exempt from China’s value-added tax for thirty years.

Why is China doing this now?

China’s population is shrinking and ageing rapidly. The government is using both taxes on contraception and financial benefits for parents to try and increase the birth rate.

What other measures is China taking to encourage births?

Alongside the tax, measures include longer maternity leave, proposed paternity leave, and tax exemptions for childcare services. These incentives aim to lower the cost of having children.

Did China’s previous one-child policy contribute to this problem?

Yes. The strict one-child policy, which lasted decades, led to a steep decline in births. This created the current ageing population crisis the new policies are trying to fix.

Have recent policy relaxations helped increase births?

No. Even after allowing two and then three children, birth rates have remained low. The population has continued to fall for three years in a row, prompting more direct action.

What are the main reasons young Chinese are reluctant to have children?

High living costs, expensive education, and a competitive job market are the biggest factors. Many young couples feel financially unable to support a child.