China reintroduces 13% VAT on contraceptives: Why this move may backfire amid declining birth rates

China reintroduces 13% VAT on contraceptives: Why this may fail to boost birth rates

• China to reintroduce 13 percent VAT on contraceptives from January 2026
• Experts warn the tax may reduce access to birth control for vulnerable groups
• Analysts say broader reforms are needed to address China's declining birth rate

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China has reintroduced a 13% value-added tax (VAT) on condoms, birth control pills, and other contraceptives from January 1, 2026, ending a roughly 30-year exemption. The move comes as Beijing seeks to address the country’s declining fertility rate, currently around 1.0 children per woman, far below the replacement level of 2.1.

While the tax marginally increases the cost of contraceptives, experts and public-health advocates warn it may reduce access to safe birth control, particularly for young and low-income citizens, without significantly encouraging higher birth rates.

The government has simultaneously expanded support for families, including a national childcare programme providing one-time payments of roughly 3,600 yuan (over USD 500) per child under three, along with extended parental leave and other incentives.

Despite these measures, analysts note that decades of low fertility, high child-rearing costs, urbanization, delayed marriages, and social changes mean that raising the birth rate through symbolic gestures like taxing contraceptives is unlikely to succeed.

China’s demographic challenges are partly rooted in the legacy of the one-child policy, which sharply reduced fertility from over 7.0 in the 1960s to 1.5 by 2015. Even after relaxing family-size limits to two children in 2016 and three in 2021, fertility rates continued to decline.

Observers argue that economic and social pressures, including housing, education costs, job insecurity, and demanding work culture, are the main barriers to higher birth rates, rather than access to contraceptives.

Critics of the new VAT say it risks undermining public health by making contraception less accessible and could lead to unintended pregnancies and sexually transmitted infections, particularly among vulnerable populations.

They suggest that policies should focus on comprehensive family support, affordable childcare, housing, education, and workplace reforms rather than symbolic taxes that have little effect on fertility decisions.

China’s policymakers face the dual challenge of stimulating birth rates while safeguarding public health. Demographers warn that without broader structural reforms addressing financial, social, and professional barriers, the country may continue to struggle with a shrinking population, an ageing workforce, and rising dependency ratios.