China Taxes Contraceptives, Eases Childcare Levies to Address Population Decline

China Taxes Contraceptives, Eases Childcare Levies to Address Population Decline
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China has begun imposing a 13% value-added tax on contraceptives while exempting childcare and related services, as part of efforts to address a prolonged population decline, Fox News reported. The measures took effect on Jan. 1 and mark a shift from policies dating back to the era of strict birth limits.

The tax overhaul removes exemptions in place since 1994, when China was enforcing the one-child policy. Under the new framework, products such as birth control pills are taxed, while childcare, marriage-related services and elderly care are exempt from VAT. Authorities say the changes aim to reduce family burdens and encourage marriage and childbearing.

China’s population has declined for three consecutive years, with about 9.54 million births recorded in 2024, roughly half the level seen a decade earlier. Officials face mounting demographic pressure from an aging population and slower economic growth, even as India has surpassed China as the world’s most populous nation.

The policy has drawn mixed reactions domestically. Some citizens argue the cost of contraception is minor compared with raising children, while health experts warn higher prices could reduce access and increase unintended pregnancies and infections. Analysts remain skeptical the tax change alone will significantly lift fertility rates.