Facing a sharp drop in the birthrate, China has decided for the first time in 30 years to impose value-added taxes on contraceptive devices, including condoms, and birth control pills.
According to Bloomberg on the 2nd (local time), starting in January next year China will newly apply a 13% value-added tax to contraceptive devices and birth control pills, which had been tax-exempt items since 1993, under a revised Value‑Added Tax Act.
By contrast, the revised bill includes childcare services, elder care, welfare for people with disabilities, and marriage-related services as tax-exempt, a policy change seen as an incentive to encourage childbirth.
The move contrasts with the previous stance in the 1990s under the "one-child policy," which actively encouraged contraception, and concerns over labor shortages and slower economic growth due to the falling birthrate appear to have driven the policy shift.
China's birthrate has been declining for decades, and the population has fallen for three consecutive years even after the one-child policy ended in 2016. The number of births last year was 9.54 million, about half of the 18.8 million in 2016.
Experts say the tax measure is more symbolic, aimed at creating a climate that encourages childbirth rather than directly affecting the birthrate.
Heo Yafu, a demographer at the Youai Population Research Institute in China, said, "The tax has more symbolic meaning than practical effect," and noted, "It shows the government's social direction of encouraging childbirth and reducing abortions."
But there are also concerns. Higher condom prices could fuel the spread of sexually transmitted diseases. China's human immunodeficiency virus (HIV) and acquired immune deficiency syndrome (AIDS) infection rate surged from 0.37 per 100,000 people in 2002 to 8.41 in 2021. Most cases are infections from sex without contraception.
Experts warn that rising condom prices could hinder the prevention of sexually transmitted diseases. Critics also say the measure is ineffective.
In a recent report, the Youai Population Research Institute estimated that in China it costs about 538,000 yuan (about 111.7 million won) to raise one child to adulthood (age 18). This is also why younger generations prioritize financial independence and careers over marriage and child-rearing.
Critical reactions to the policy are spreading on social media (SNS) in China. Internet users are responding by questioning its practicality and effectiveness, saying, "It's inappropriate to raise condom prices when sexually transmitted infections are increasing," and "How can someone who can't afford condoms raise a child?"