China Ends Tax Exemption on Contraceptives in 2025

China has ended a more than three-decade-old tax exemption on contraceptive drugs and devices, effective January 1, 2025, as part of broader efforts to reverse the country's declining birth rate. Condoms, birth control pills and other such items will now face a 13 percent value-added tax, the standard rate for most consumer goods, according to government announcements.

The policy shift comes amid ongoing demographic challenges in the world's second-largest economy. Official data from the National Bureau of Statistics show China's population declined for the third consecutive year in 2024, dropping by 1.39 million to just over 1.408 billion people. Births totaled 9.54 million last year, roughly half the number recorded a decade earlier, with the birth rate per 1,000 people at 6.77, near historic lows. Experts predict the downturn will persist without significant interventions.

Beijing has introduced several measures to encourage childbearing. Last year, authorities exempted childcare subsidies from personal income tax and launched an annual childcare allowance. Other initiatives in 2024 included directives for colleges and universities to offer "love education" promoting positive...