China removed a three-decade-old tax exemption on contraceptive drugs and devices from January 1 in new steps to spur a flagging birth rate.
Condoms and contraceptive pills now incur a value-added tax of 13%, the standard rate for most consumer goods.
The move comes as Beijing struggles to boost birth rates in the world’s second-largest economy. China’s population fell for a third consecutive year in 2024, and experts have cautioned that the downturn will continue.
China has now exempted childcare subsidies from personal income tax and rolled out an annual childcare subsidy last year, following a series of “fertility-friendly” measures in 2024, such as urging colleges and universities to provide “love education” to portray marriage, love, fertility, and family in a positive light.
Top leaders again pledged last month at the annual Central Economic Work Conference to promote “positive marriage and childbearing attitudes” to stabilise birth rates.
One-Child Policy
China’s birth rates have been falling for decades as a result of the one-child policy China implemented from 1980 to 2015, and rapid urbanisation.
The high cost of childcare and education, as well as job uncertainty and a slowing economy, have also discouraged many young Chinese from getting married and starting a family.
The CNN reports that January 1 marks 10 years since China scrapped its notorious “one-child” policy, after the government realized that a falling birth rate threatened to derail the growth of the world’s second-largest economy.
But the landmark change – and a raft of other measures to encourage couples to have more kids – have failed to boost the population.
Chinese leader Xi Jinping has evoked the need for “population security” and made the “development of a high-quality population” a national priority. Analysts expect more policies or incentives to support births and marriage in the year ahead.
But many in China say boosting birth rates means addressing core issues like high youth unemployment, the high cost of raising children, and what’s seen as an unfair burden of child-raising on women, reports CNN.
(with inputs from Reuters)
