Starting next year, the Chinese Government will make a considerable change to the list of tax-exempt goods and services in the country.
Get this, for the first time in three decades, China will no longer exempt birth control products such as condoms from Value Added Tax (VAT), which it hopes will boost birth rates in the country.
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China is making contraceptives 13% more expensive so that its citizens will have more babies
According to Euronews, contraceptives will be subject to a 13% levy starting 1 January 2026 through legislation that was approved in late December 2024.
Furthermore, the legislation also encourages Chinese citizens to have babies by removing VAT on childcare providers, elder-care institutions and marriage-related services.
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While the legislation was approved last year, it will only come into effect in 2026, as the Chinese Government gave local authorities and businesses a full year to prepare for the change.
China is one of the most expensive countries in the world to raise a child
This move is a response to declining birth rates, with the country recording an average of 6.77 births per 1,000 people in 2024.
Meanwhile, the World Bank’s data showed that the fertility rate of the Chinese population was 1.0 in 2023, approximately half the 2.1 level needed to maintain the country’s population.
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Previously, from 1979 to 2015, the country implemented a strict one-child policy, which restricted most families to a single child. During this period, China promoted widespread use of contraception and sterilisation due to concern that limited resources could not keep pace with rising births.
However, this most recent move has raised some fears among critics, including the spread of sexually transmitted diseases.
Furthermore, many critics said that the policy is insufficient, as the cost of raising a child in China is getting too expensive. YuWa Population Research Institute in 2024 revealed that the average cost of raising a child in China until the age of 18 is CNY538,000 or ~RM312,758, one of the most expensive countries for parents globally.
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So, what do you think of China’s new policy? Share your thoughts with us in the comments.
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