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China is set to impose a value-added tax (VAT) on condoms and other contraceptives for the first time in three decades, as the country tries to boost its birthrate<\/a> and modernise its tax laws.<\/p>\n From 1 January, condoms and contraceptives will be subject to a 13% VAT rate \u2013 a tax from which the goods have been exempt since China<\/a> introduced nationwide VAT in 1993.<\/p>\n The measure was buried in a VAT law passed in 2024 in an effort to modernise China\u2019s tax regime. VAT accounts for nearly 40% of China\u2019s total tax revenue.<\/p>\n After imposing a strict one-child policy for more than 30 years, China has over the past decade been introducing a suite of \u201ccarrots\u201d to induce people to have more children in a bid to boost the falling birthrate<\/a>.<\/p>\n As well as raising the limit on the number of children permitted per couple to three, provinces have been experimenting<\/a> with offering discounts on IVF treatment and cash subsidies for extra children. Some local governments offer newlyweds extra days of paid leave to encourage people to tie the knot.<\/p>\n But the fact that condoms and contraceptives look set to become more expensive has been met with ridicule on social media. \u201cWhat is wrong with modern society? They are truly going to extreme lengths just to make us have children,\u201d wrote one user on Weibo.<\/p>\n The new VAT law also includes a tax break for childcare and \u201cmarriage introduction services\u201d.<\/p>\n This year, the government also allocated 90bn yuan ($12.7bn) for its first nationwide childcare subsidy programme, offering 3,600 yuan annually for each child aged under three. And on Saturday it announced plans to expand its national healthcare insurance programme to cover all childbirth related expenses.<\/p>\n But incentives have had little effect. In 2024, the birthrate was 6.77 per 1,000 people, a slight increase on 2023, but still far below historical levels. A rising death rate caused by an ageing population means China\u2019s population has been shrinking<\/a> for at least three years.<\/p>\n Now there are concerns authorities may be turning to \u201csticks\u201d to achieve the national policy goal of more babies.<\/p>\n