January 2, 2026 - Beijing has introduced a controversial policy aimed at boosting population growth by taxing contraceptives, including condoms and birth control pills, while exempting childcare, marriage, and elder-care services from taxation. The move marks the end of a decades-old exemption that had kept contraceptives affordable since the early 1990s, when China enforced its strict one-child policy.

According to Newsweek, the new rules impose a 13 percent VAT on contraceptive drugs and devices, while services related to family support are now tax-free. Firstpost reported that the exemption had been in place for more than 30 years, reflecting China’s earlier family-planning regime, but was scrapped as the country grapples with one of its lowest birth rates on record.

Official figures show that only 9.54 million babies were born in China in 2024, roughly half the number recorded a decade earlier. The population has now declined for three consecutive years, with deaths outpacing births. India overtook China as the world’s most populous country in 2023.

The government has paired the contraceptive tax with incentives such as cash handouts, extended parental leave, and tax exemptions for childcare and marriage services. Analysts say the policy reflects Beijing’s urgent attempt to encourage young couples to marry and have children amid an aging society and sluggish economy.

Critics, however, argue that taxing contraceptives could backfire by limiting access to affordable reproductive health products, potentially increasing unintended pregnancies and straining families already burdened by high living costs. The Economic Times noted that the measure has sparked debate over whether it undermines reproductive rights while failing to address deeper issues such as housing affordability and job insecurity.

China’s demographic crisis remains one of its biggest challenges, with experts warning that without effective reforms, the shrinking workforce and aging population could severely impact economic growth in the coming decades.

Taxing Sex to Save a Nation?

China’s move to tax contraceptives is controversial, but it is not happening in isolation. Low birth rates are now a global trend, not a uniquely Chinese problem. From Japan and South Korea to parts of Europe and even Southeast Asia, fewer people are choosing to have children. The reasons are strikingly similar everywhere: high living costs, unstable jobs, expensive housing, delayed marriages, and a growing sense that the future feels fragile.

Seen in this light, Beijing’s policy looks less like innovation and more like frustration boiling over. When incentives fail, governments reach for pressure. But taxing condoms and birth control pills does not make parenthood affordable. It only makes reproductive choices harder, especially for the poor.

The uncomfortable truth is this: people are not rejecting children, they are rejecting systems that make family life feel like a financial gamble. No tax policy can undo long work hours, low wages, or the fear of raising a child in an uncertain world.

If low birth rates are a worldwide warning sign, then the response should be global wisdom, not shortcuts. Coercion, even in subtle forms, rarely builds trust. And without trust, no population policy, no matter how aggressive, will work.