China cancels 30-year tax exemption: contraceptives will be taxed at 13% from 2026

New tax regime for contraceptives in China

According to Главком: China is introducing a new tax regime for contraceptives starting January 1, 2026, abolishing exemptions that have been in place for the past 30 years. This decision is in response to the prolonged population decline being observed in the country. Chinese authorities have revoked the exemption that previously exempted contraceptives from taxation, and the general VAT rate for condoms and birth control pills will now be 13%.

Impact on young families and demographic situation

In 2024, China's population decreased for the third consecutive year, raising concerns within the government. In this regard, Chinese authorities are taking steps to encourage family formation among the youth, attempting to prevent further declines in birth rates. The new tax regime is expected to further influence young people's choices regarding family planning.

Additionally, from January 1, 2026, new internet censorship rules in China will also come into effect. These changes in tax policy and other areas indicate that the Chinese government is actively responding to the challenges associated with the changing demographic situation in the country.

The introduction of the new tax regime for contraceptives is part of a broader strategy by the Chinese government aimed at combating declining birth rates and an aging population. The abolition of tax exemptions on contraceptives may negatively impact young couples who are already facing financial difficulties. Thus, the authorities are trying to find a balance between controlling birth rates and supporting family values, which is a complex task in the context of modern socio-economic challenges.