China reintroduces tax on condoms and pills

Curious tax reintroduced

China wants to increase the birth rate

China’s population needs more children to avoid shrinking. Now a tax should help.

The Chinese government is worried about the offspring. People have long since moved away from the one-child policy, but the birth rate is still too low. Now the government in Beijing is trying to impose taxes.

The pill and condoms had not been taxed for three decades. That should now change, reports the Reuters news agency. A tax of 13 percent is intended to make contraceptives more expensive and apparently deter customers. The tax corresponds to the usual VAT rate in China.

China’s population fell for the third consecutive day in 2024, and experts warn that decline will continue. China has already exempted childcare subsidies from income tax and introduced an annual childcare subsidy last year. Two years ago the communist government introduced a series of “pro-birth” measures. Among other things, colleges and universities have been asked to offer “love education” to portray marriage, love, fertility and family in a positive light, Reuters reports.

President Xi Jinping’s officials recommitted to promoting “a positive attitude toward marriage and childbearing” to stabilize the birth rate at the annual Central Economic Work Conference in December. The high cost of child care and education, as well as labor market uncertainty and a slowing economy, have also discouraged many young Chinese from marrying and starting a family.

The country has still not recovered from the doctrine that families were only allowed to have one child, abandoned in 2015. According to the Mercator Institute for China Studies, the legacy is proving “difficult to reverse.”

Systemic factors are equally difficult to combat, according to his analysis, including the rising costs of raising children and workplace discrimination against women of childbearing age. Even child benefit of the equivalent of 430 euros per month is apparently not enough. In 2022, China’s birth rate fell to an estimated 1.09 births per woman, well below the replacement level of 2.1 and similar to Japan or South Korea.