This is how China fights demography. Tax on contraceptives up

The sales tax on contraceptives in China will increase by 13% from January 1. as part of the government's policy of increasing fertility, the BBC reported on Thursday.

The tax covers condoms, pills and other contraceptives.

The new tax rules eliminated many of the deductions introduced in 1994, when China still had a one-child rule. At the same time, VAT was abolished on services related to weddings and care for the elderly.

The change in demographic policy is related to the aging of the country's population. The authorities are now trying to encourage residents to get married and have children.

According to official data, in 2024, China's population decreased for the third year in a row. 9.54 million children were born, which is about half as many as 10 years ago, when the authorities began to relax the one-child policy.

As the BBC emphasized, tax changes may not be enough to encourage residents to have more children, as the decline in the number of births is a broader cultural trend, also visible in, for example, South Korea and Japan.

China is one of the countries in the world where raising a child is associated with the highest costs – according to the 2024 report of the YuWa Institute of Demographic Research in Beijing. These costs are higher due to high school fees and the difficulties many women have in combining work with childcare.

Henrietta Levin from the Washington think tank Center for Strategic and International Studies (CSIS) pointed out that the implementation of government plans may also be hampered by the fact that a significant part of the costs related to the new demographic policy would be borne by the indebted authorities of Chinese provinces. (PAP)

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