A new fiscal measure in China is sparking widespread discussion: a proposed value-added tax (VAT) on contraceptive drugs and products. This marks a significant policy shift, as for the first time in over three decades, these items will no longer be exempt from the standard 13% VAT, effective January 1st. While official channels have not extensively covered this development, Chinese social media is abuzz with reactions. Many users are questioning the logic behind taxing contraceptives as a means to boost the birth rate, pointing out that the prohibitive costs of raising a family are a far greater disincentive. China’s population has been steadily decreasing, prompting the government to move away from its stringent one-child policy, which was in effect from around 1980 to 2015. Subsequent policy relaxations have allowed families to have two children since 2015 and three since 2021. Despite these shifts, contraception has remained readily available and promoted. Health experts are raising alarms about the potential repercussions of increased contraceptive costs, including a rise in unintended pregnancies and a greater prevalence of sexually transmitted infections. The nation’s birth rate has plummeted, with 2024 recording just 9.5 million births, a sharp contrast to the 14.7 million in 2019. This demographic decline has already led to India surpassing China in population size.
