China’s birth rate has sharply declined, prompting the Chinese Communist Party to employ various measures to boost birth rates. Starting from January 1 next year, authorities are set to impose a 13% tax on contraceptive drugs and devices. Some netizens criticized this move, attributing the low birth rate primarily to low income and limited holidays, suggesting that other measures are futile.
On January 1, 2026, the Value Added Tax Law will officially be enforced, replacing the existing Provisional Regulations on Value Added Tax. Of note, under the new law, contraceptive drugs and devices will no longer be exempt from value-added tax, and will instead be subject to a 13% tax rate. Value added tax is a turnover tax, with the ultimate burden theoretically borne by the final consumer, meaning consumers will bear the cost.
On December 1, a report by a Chinese financial media outlet disclosed the aforementioned news and invited scholars from Shanghai Jiao Tong University and China University of Political Science and Law specializing in tax law to provide analysis.
Experts pointed out that when the Value Added Tax Law Provisional Regulations were first promulgated in 1993, contraceptive drugs and devices were included in the tax-exempt items, a classification that remained through subsequent revisions. At that time, China was implementing the one-child policy to “control rapid population growth.” However, China’s population policy has since undergone significant changes, now focusing on encouraging childbirth, leading to the adjustment of this tax preference policy.
A self-media post by “Chief Technology Officer” calculated that a contraceptive condom manufacturer with an annual sales revenue of 500 million yuan would face an additional 65 million yuan in annual value-added tax expenses at a 13% tax rate. The impact will be felt particularly by public welfare channels. An official from a disease control center revealed that government procurement budgets have not increased in sync, potentially resulting in a 20% reduction in free distribution next year. A tax expert indicated that this adjustment could result in an annual increase of around 2 billion yuan in tax revenue, equivalent to 10,800 yuan per child subsidy covering an additional 185,000 newborns.
The news swiftly spread online, with netizens commenting, “Is raising the cost of contraception meant to boost birth rates?” “Will contraceptive products be directly removed from the market in the future?” “A forced combination to boost birth rates.” “Which genius came up with this idea?”
“Elevating contraceptive costs to increase birth rates?” “Raising prices of contraceptive products will enhance birth rates?” “Instead of addressing the root causes, they come up with all kinds of ineffective solutions.” “The main reason for low birth rates is low income and limited holidays; focus on what matters.”
A financial blogger, “Hang Hang Kai Kai,” remarked, “The idea that ‘raising condom prices can promote childbirth’ is simply a joke!” Many ordinary people’s initial reaction upon hearing about the impending imposition of value-added tax on contraceptive drugs and devices resonates with this sentiment. In the current environment where the average annual cost of raising a child easily exceeds tens of thousands of yuan, a slight increase of around 30 yuan per year in contraceptive costs pales in comparison to expenses incurred for housing, education, childcare, etc., from birth to adulthood.
“The real deterrent for young people to not have children has never been the affordability of contraceptive products, but the layers of anxiety and real-life pressures faced during the child-rearing process, a fact readily understood by delving into ordinary households.”
“For low-income groups and individuals with specific medical needs, the impact of contraceptive price increases is profoundly destructive. Take women who rely on contraceptive drugs long-term for conditions like polycystic ovary syndrome as an example; price hikes could directly add to their medical burdens, leading some to reduce medication due to economic pressures, subsequently affecting disease management…
“Public opinion widely urges policymakers to address the fundamental issues contributing to low birth rates. Instead of raising contraceptive costs, suggestions include reducing prenatal examination fees, expanding medical insurance coverage for reproductive health services, enhancing childcare subsidies, improving childcare services, resolving workplace discrimination against women regarding childbirth, and ensuring maternity leave protection. These, they argue, are more effective measures.”