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China will levy a value-added tax (VAT) on contraceptive drugs and products for the first time in more than three decades, according to the country’s newly revised law. Consumers will now have to pay a 13% tax on these items that were VAT-exempt since 1993.
Simply put, the country aims to tackle plunging birth rates that threaten to slow its economy by imposing taxes on contraceptive drugs and products. These items were VAT-exempt since China enforced a one-child policy, which has since been changed, and strongly encouraged birth control over the past three decades.
As the number of deaths has been higher than the number of births in China, India overtook as the world’s most populous country in 2023.
China’s new ‘condom tax’: Reasons
With China's population numbers not a worry in the typical sense, contraceptive drugs and products will no longer be exempt from tax from January 1, under the country’s revised VAT law.China is shifting from reducing birth rates to encouraging people to have more kids.
Its population has, in fact, declined for three consecutive years, with only 9.54 million births recorded in 2024, which is roughly half of the 18.8 million births registered almost 10 years ago, when the one-child policy was lifted, news agency Bloomberg reported.

