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Why China is imposing 13% tax on condoms after years of exemption | Explained
As China's number of deaths has been higher than the births, India overtook as the world’s most populous country in 2023
China will levy a value-added tax (VAT) on contraceptive drugs and products for the first time in more than three decades, according to the country’s newly revised law. Consumers will now have to pay a 13% tax on these items that were VAT-exempt since 1993.
Simply put, the country aims to tackle plunging birth rates that threaten to slow its economy by imposing taxes on contraceptive drugs and products. These items were VAT-exempt since China enforced a one-child policy, which has since been changed, and strongly encouraged birth control over the past three decades.
As the number of deaths has been higher than the number of births in China, India overtook as the world’s most populous country in 2023.
China’s new ‘condom tax’: Reasons
With China's population numbers not a worry in the typical sense, contraceptive drugs and products will no longer be exempt from tax from January 1, under the country’s revised VAT law.
China is shifting from reducing birth rates to encouraging people to have more kids.
Its population has, in fact, declined for three consecutive years, with only 9.54 million births recorded in 2024, which is roughly half of the 18.8 million births registered almost 10 years ago, when the one-child policy was lifted, news agency Bloomberg reported.
The government increased the birth limit to two children in 2015. As China’s population reached its peak and then began to decline, the limit was raised again in 2021 to three children.
Over the years, contraception has been largely promoted and has also been easy for people to access, even at no cost. Now, items like condoms will face the standard 13% rate that applies to most goods.
Public health risks to the decision, warn experts
Yet, experts have raised concerns that using fewer condoms could increase public health risks. One of the experts, not named, told AP, “Higher prices may reduce access to contraceptives among economically disadvantaged populations, potentially leading to increases in unintended pregnancies and sexually transmitted infections. Those outcomes could, in turn, lead to more abortions and higher health-care costs.”
Cases of sexually transmitted infections in China have been increasing again after a drop during the COVID-19 pandemic years, with more than 100,000 gonorrhea patients and 670,000 syphilis patients in 2024, according to figures from the National Disease Control and Prevention Administration.
(With inputs from agencies)
