HONG KONG, Jan 2 (Reuters) – China has scrapped its 30-year-old tax exemption policy for birth control pills and contraceptive supplies from Jan 1, in a new move to spur low fertility rates.
Condoms and birth control pills are now subject to 13% VAT, which is the standard rate for most consumer goods.
The move comes as Beijing strives to boost birth rates in the world’s second-largest economy. China’s population fell for a third consecutive year in 2024, and experts warn the decline will continue.
Following the launch of a series of “birth-friendly” measures in 2024 (such as urging colleges and universities to carry out “love education” to portray marriage, love, fertility and family in a positive light), China exempted childcare subsidies from personal income tax and launched an annual childcare subsidy last year.
Last month, senior leaders reiterated their commitment at the annual Central Economic Work Conference to promote a “positive view on marriage and childbearing” and stabilize the birth rate.
China’s birth rate has been declining for decades due to the country’s one-child policy from 1980 to 2015 and rapid urbanization.
High childcare and education costs, as well as job uncertainty and an economic slowdown, also prevent many young Chinese from getting married and starting families.
(Reporting by Claire Jim; Editing by Kate Mayberry)