China to Tax Condoms as Birth Rates Fall and Family Costs Stay High

A 13 percent tax marks a change in population policy

China will impose a 13 percent value added tax on contraceptive drugs and devices, including condoms, starting in January, ending an exemption that dates to 1993. The change comes as the government tries to encourage more births after decades of policies designed to limit them.

The newly revised Value Added Tax law takes two approaches to family costs: it makes contraception taxable while exempting child care, registered elder care institutions, disability service providers and marriage related services. Authorities have presented the changes as part of a broader effort to make family life more affordable and convenient.

National births have fallen for three consecutive years, reaching 9.54 million in 2024, roughly half the number recorded a decade earlier. The estimated fertility rate was about 1.15 children per woman in 2024, far below the level needed to keep the population steady.

The contraception tax is an unusual part of that response. Local cash grants for newborns, longer parental leave and plans for stronger community child care aim to reduce the burden of raising a family. Taxing condoms instead raises the price of a product used to prevent both pregnancy and sexually transmitted infections.

Whether that extra expense will encourage more people to have children is uncertain. Housing, education, child care and working conditions weigh heavily on decisions about parenthood. Public health specialists also warn that making condoms more expensive could discourage protection, especially among people with limited incomes.

Policy makers are trying to change social expectations as well as household spending. For decades, strict birth control shaped family life. The current measures ask people to consider larger families while confronting costs and pressures that a small change in contraceptive prices may do little to address.

What changes under the VAT law?

Contraceptive drugs and devices will lose their exemption when the new tax begins in January. Condoms and other medical products used to prevent pregnancy will fall within the 13 percent VAT category.

Value added tax is a tax applied to goods and services. Consumers may encounter its effects through the price they pay, although the size of a retail increase depends on how sellers handle the added tax. The new treatment ends about three decades in which contraception was exempt.

China introduced that exemption in 1993, during an era when national family planning rules limited births, encouraged later marriages and promoted longer intervals between children. Authorities also distributed birth control, including intrauterine devices, and used sterilization on a large scale. An intrauterine device, often called an IUD, is placed inside the uterus to prevent pregnancy.

The revised law now directs tax relief toward care and family services. Child care providers, registered elder care institutions, disability service organizations and marriage related services will not collect VAT under the revision.

Those exemptions could reduce costs for households if providers pass their savings on to customers. Child care fees are a recurring expense, so any reduction would affect family budgets differently from a small increase in the cost of an occasional contraceptive purchase.

From birth limits to support for larger families

China's population policy has changed sharply over the past decade. The one child policy was implemented nationwide in 1979 and enforced for decades, with rules evolving over time. It was replaced by a two child rule in 2016, and the government removed all birth limits in 2021.

The main stages show how the priorities behind the tax system have changed:

• 1979: China implemented the one child policy nationwide.
• 1993: Contraceptive drugs and devices received a VAT exemption during the period of strict family planning.
• 2016: A two child rule replaced the one child policy.
• 2021: The government removed all birth limits.
• 2024: Births reached 9.54 million, and the estimated fertility rate was about 1.15 children per woman.
• January following the December 2025 announcement: A 13 percent VAT is due to begin on contraceptive drugs and devices.

Births have continued to decline despite the relaxation of restrictions. China is also aging quickly: by 2040, almost three in ten residents could be aged 60 or older. A larger older population puts pressure on pensions while a smaller pool of working people limits the labor available to support the economy.

Cities and provinces have responded with baby bonuses, housing preferences for young families, longer maternity and paternity leave, and expanded child care. National guidance has also urged a reduction in abortions that are not medically necessary. The VAT changes follow the same policy direction, combining support for care with a higher cost for preventing pregnancy.

How much more could condoms cost?

A pack of condoms priced at 20 yuan illustrates the scale of the tax: 13 percent of that amount is 2.6 yuan. That is a modest sum compared with the cost of raising a child, but its effect may vary among consumers.

Students and workers on low wages can be more sensitive to small price changes, particularly when they buy products repeatedly. Contraception is also often purchased discreetly, which can make access and purchasing decisions more complicated than the price alone suggests.

The online debate has reflected two different concerns. Some people argue that more expensive condoms could discourage consistent use, increase unplanned pregnancies and expose users to infections. Others consider the extra cost too small to change decisions about having children and see the measure mainly as a signal of the government's new priorities.

Choosing to become a parent involves years of care and expense. A tax that changes the price of contraception acts at a much narrower point: whether someone buys a product and uses it consistently. That helps explain why the discussion has focused on sexual health as well as birth numbers.

What earlier research found about contraceptive use

Research following thousands of couples in Shanghai in the late 1980s and 1990s found that contraceptive use before marriage was low. Early in marriage, couples relied heavily on traditional methods, before shifting toward highly effective contraception after the first birth, especially IUDs.

Condoms were more common among newly married couples than among couples who had been married longer. Younger couples also had high rates of discontinuing modern contraceptive methods, meaning they stopped using a method after beginning it.

The researchers identified stigma, limited sex education and poor access for single people as barriers to effective protection. They suggested that free condoms and better information would help people use contraception more reliably.

Those findings describe patterns from an earlier period, but the practical concerns remain part of the current policy debate. Price, knowledge, social discomfort and access all affect whether people can obtain protection and continue using it. Raising the price of a product adds another consideration for users who already face those barriers.

Why the health debate extends beyond pregnancy

Public health officials have reported rising HIV cases in recent years, with most new infections linked to unprotected sex. Condoms have a distinct role because they are the only contraceptive method that prevents both pregnancy and sexually transmitted infections.

Higher prices, even modest increases, can lead some users to choose less effective options or skip protection. The greatest risks fall on people who are young, have limited income or face stigma when buying contraception.

Health agencies can reduce those risks by making free or subsidized condoms available in clinics, on campuses and at community sites. Such access could offset the extra cost from VAT for people who might otherwise struggle to pay.

Clear information about protection against both pregnancy and infection also matters, alongside regular testing and timely treatment. The earlier Shanghai research linked better information and easier access with more effective contraceptive use.

The government's aim of reducing abortions that are not medically necessary also connects to access to contraception. Effective pregnancy prevention helps reduce unintended pregnancies. Less consistent condom use would work against that objective while creating additional risks for sexual health.

The much larger cost of raising a child

An estimated 538,000 yuan is needed to raise a child to age 18, a figure that appears repeatedly in the national discussion about family formation. Against that total, the illustrative 2.6 yuan tax on a 20 yuan pack of condoms is small. The two figures show the gap between a purchase price and the financial commitment involved in parenthood.

Housing prices in large cities, competition for school places, extracurricular fees and child care bills all weigh on household decisions. Parents must also account for the time spent caring for children and the income or career opportunities they may give up.

Young workers frequently report long hours and limited flexibility. Women can face penalties at work for pregnancy and time away, making a second or third child harder to consider even when a family would otherwise like to grow.

The exemption for child care services is intended to reduce part of those recurring costs. Monthly fees could fall if providers pass the tax savings on to parents. Families would welcome such relief, although a smaller care bill may still leave housing, education and employment concerns unresolved.

Experience in other countries suggests that a single measure rarely changes fertility trends by much. A combination of reliable and affordable child care, leave shared more evenly between mothers and fathers, and fewer career penalties can have a larger effect because it reduces the continuing cost and risk associated with another child.

Menstrual products bring gender equity into the debate

Sanitary pads and tampons have been taxed at the standard VAT rate for years, while contraceptives were exempt. Women's groups challenged that difference and called for lower taxes on menstrual products.

The new law moves condoms into the taxed category while sanitary pads remain taxable. That change keeps attention on the cost of essential products used by women and girls, rather than resolving the demand for lower prices.

Advocates also point to stigma surrounding menstruation and sex education. Surveys and public debates over the past few years have highlighted gaps in students' knowledge and discomfort with discussing reproductive health.

Price and stigma can reinforce each other. Girls and women may struggle to obtain basic menstrual products, while young couples may avoid buying condoms. Both issues concern access to essential health products and the ability to make informed choices.

The broader family policy debate also involves how responsibilities are shared. Support for parents has to reach the people who pay for care, take leave and face consequences at work. The cost of reproductive health products sits alongside those pressures in discussions about gender equity.

What Hong Kong and other governments are trying

Hong Kong has extended a doubled child tax allowance so that parents can claim it for two years rather than one. Authorities have also added deductions for assisted reproduction and expanded access to subsidized child care.

Residents have welcomed the support, but many continue to identify housing and care costs as barriers to having larger families. The response echoes the concerns behind mainland China's efforts to lower the expense of parenthood.

Across East Asia, governments facing very low fertility have tested cash bonuses, tax credits and longer parental leave. Many programs produce brief increases in births that fade unless they are supported by deeper changes in working conditions and care systems.

International debates also reveal different priorities within policies aimed at encouraging births. Some political leaders focus on bonuses and fertility treatment while reducing funding for health and social programs that support parents and children. Others argue for immigration and broad family benefits as ways to stabilize population numbers and sustain growth.

The common problem is that a highly visible incentive has limited reach when raising children remains expensive and balancing work with care is difficult. A payment or tax change may help with one expense while leaving the continuing demands of parenthood largely unchanged.

Measures that address daily family pressures

China's contraception tax is likely to attract attention because it reverses a longstanding exemption. The broader discussion about supporting births, however, centers on measures that affect everyday life and the costs families expect to face over many years.

Policy options repeatedly raised in countries trying to slow population aging while protecting health include:

• Use sustained public funding to lower child care costs, rather than relying only on tax changes.
• Protect women against workplace discrimination connected to pregnancy and family leave.
• Expand paid leave for fathers so that parents can share care more evenly.
• Extend and stabilize school admissions and housing support for families with infants and toddlers.
• Expand community child care for children under three, where gaps are largest.
• Maintain or expand free contraception and sexual health services to reduce unintended pregnancies and infections.
• Improve sex education so teenagers and young adults understand pregnancy prevention and protection against disease.

These measures address different parts of the same decision. Housing support affects whether a family can accommodate a child. Reliable care affects whether parents can keep working. Protection at work reduces the career risks of pregnancy and leave. Sexual health services help people avoid unintended pregnancies and infections.

The revised VAT law combines a new charge on contraception with exemptions for services that support families. Its effect will depend on how those changes reach households, alongside the cash grants, leave arrangements and child care plans already forming part of China's response to falling births.

What to Know

• China will apply a 13 percent VAT to contraceptive drugs and devices, including condoms, starting in January, ending an exemption introduced in 1993.
• The revised law exempts child care, registered elder care institutions, disability service providers and marriage related services from VAT.
• Births fell to 9.54 million in 2024, roughly half the level a decade earlier, while the estimated fertility rate was about 1.15 children per woman.
• Almost three in ten residents could be aged 60 or older by 2040, adding pressure to pensions and the labor pool.
• Governments are using newborn grants, housing preferences, longer parental leave and child care expansion to support families.
• Public health specialists warn that higher condom prices could reduce consistent use and increase unintended pregnancies and infection risks.
• Raising a child to age 18 is estimated to cost 538,000 yuan, with housing, education, care and employment pressures shaping family decisions.
• Women's groups continue to seek lower taxes on menstrual products, which remain taxable.
• Hong Kong and other East Asian governments are also testing family support, while experience points to the limits of isolated incentives.