China’s government has announced a surprising and contentious policy change that will affect millions across the nation: beginning 1 January 2026, condoms and other contraceptive products will be subject to a 13 per cent value-added tax (VAT) for the first time in more than 30 years, a move officials say is part of broader efforts to address the country’s persistently low birth rate and modernise its tax regime.
Reversing Decades of Population Policy
Contraceptives including condoms have been exempt from VAT in China since the introduction of the national VAT system in 1993, a tax break that aligned with the one-child policy era when family planning and birth control were state priorities.
But China’s demographic landscape has shifted dramatically since then. After decades of restrictive birth-control policies — first limiting most families to one child and later to two, then three under the three-child policy — the nation now faces a sharply declining birth rate and shrinking population as deaths outpace births.
Officials argue that ending the tax exemption on contraceptives, including condoms, reflects that demographic change and brings these products into line with standard taxation. They also say it is part of broader VAT law reforms intended to modernise China’s fiscal structure.
A Symbolic Yet Controversial Shift
The tax change has been described by analysts as largely symbolic in terms of its likely impact on fertility — condoms are relatively inexpensive, and a 13 per cent tax might only raise prices marginally — but the policy’s symbolism has ignited widespread debate.
Despite Beijing’s push, recent population figures show China continuing to grapple with declining births. In 2024, the nation recorded only about 9.54 million births, a steep fall from nearly 18.8 million a decade earlier. That sustained decline has fuelled fears of labour shortages, ageing demographics, and long-term economic stagnation.
Boosters and Backlash: A Mix of Policies
The condom tax is only one piece of a larger demographic strategy. Other measures rolled out include expanded maternity and paternity leave, tax exemptions for childcare services, elder care and marriage-related services, and financial support packages aimed at reducing the cost of parenting.
China has also introduced nationwide childcare subsidies and eliminated out-of-pocket expenses for childbirth services — efforts that target the rising costs of raising children, which many experts say are the real drivers behind low fertility.
Still, critics argue these incentives are overshadowed by deeper economic and social barriers. Urban living costs, housing affordability issues, job insecurity, and long working hours are frequently cited by young Chinese as primary reasons they delay or forgo having children altogether.
Public Reaction: Ire and Irony
The tax proposal has sparked a flurry of reactions on Chinese social media and beyond. Some users have mocked the policy, suggesting it makes even casual sex more costly and absurdly positions contraception as a barrier to family growth, while others express frustration at what they see as intrusive state influence on personal and reproductive choices.
One comment widely shared described the measure with biting humour: “Now not only can’t we afford to have children, we can hardly afford to have sex,” reflecting widespread skepticism that the tax will meaningfully persuade couples to start families.
Health Experts Raise Broader Concerns
Public-health scholars and advocacy organisations have not limited criticism to demographic skepticism. Some warn that higher prices on contraceptive products could reduce accessibility, especially among lower-income or younger populations, potentially increasing unplanned pregnancies and sexually transmitted infections (STIs) if condom use declines as a result.
China already faces elevated public-health challenges: high abortion rates and increasing STI incidence have been documented in recent years, including rising cases of syphilis, gonorrhoea, and HIV among certain age groups.
What the Policy Says — and Doesn’t Say
Beijing has framed the tax as a rational realignment of its population and tax policies. Experts note that while the move may serve fiscal objectives within the VAT system, its effectiveness as a fertility lever is questionable, given the complex socio-economic factors at play.
Economists and demographers highlight that expanding affordable childcare, housing support and employment stability would likely have a greater impact on family planning decisions than marginal tax changes on contraceptives.
A Policy in Context
China’s demographic dilemma was long foreshadowed. After decades of restricting births — often through coercive measures — the government has struggled to reverse the cultural and economic forces discouraging larger families. Urbanisation, rising individualism, expanding education, and rising costs of living have all contributed to a fertility rate well below replacement levels.
The condom tax may be emblematic of the state’s desire to signal urgency on this issue, but many analysts believe that without broader structural reforms, such measures will have limited impact on reversing demographic decline.
