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Wednesday, January 21, 2026
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China to Tax Condoms After Three Decades in Demographic Policy Shift

This Week

After three decades of tax-free status, condoms in China will soon be subject to VAT under a new policy aimed at countering the country’s deepening demographic decline, but public health critics warn it may increase the risk of sexually transmitted infections. 

The new measure, which will impose a 13 percent value-added tax (VAT) starting in January 2026, marks a significant reversal in Beijing’s population policy as the country confronts rapidly declining birth rates.

For decades, condoms were exempt from VAT, making them widely affordable and accessible. This exemption aligned with China’s strict population-control policies,”one-child policy,” which relied heavily on promoting contraception to limit family size from 1979 to 2015.

Under the revised VAT law approved in December 2024, condoms will no longer qualify for tax exemption. The law takes effect in January 2026, giving local authorities and businesses a full year to adjust their systems. Items such as agricultural products, medical treatments, and cultural activities remain exempt, but contraceptives were intentionally excluded.

At the same time, Beijing is offering new tax breaks to support family formation. 

VAT will be removed for childcare providers, elder-care services, and marriage-related businesses in an effort to reduce financial burdens for young families.

The policy shift comes as China’s birth rate has fallen steadily for years. In 2024, the country reported only 6.77 births per 1,000 people, among the lowest rates globally. The fertility rate dropped to just 1.0 in 2023, half the 2.1 level needed to maintain population replacement, according to the World Bank.

The one-child policy, enforced through fines, registration limits, and workplace monitoring, successfully curbed population growth but created long-term challenges: a shrinking workforce, rapid aging, and an imbalanced sex ratio stemming from cultural preferences for sons. 

After 73 years as the world’s most populous country, China was surpassed by India in 2023, according to the United Nations.

Public Health Concerns

While the condom tax aims to incentivize higher birth rates, public health experts warn it may increase the risk of sexually transmitted infections.

Critics also argue that raising condom prices will do little to reverse demographic decline as long as the cost of raising children remains prohibitively high.

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