China is preparing to bring a major change to its tax rules, and the news has quickly drawn attention around the world. For the first time in 30 years, condoms will not receive VAT-exempt status anymore.
The change comes as China continues to face a serious decline in birth rates, and the government hopes this new policy will support efforts to increase population growth. According to a video , the demographic situation has become one of the country’s biggest concerns this year.
A New Law with a Major Shift
The new law was officially approved in late December 2024 and includes a revised list of items that will remain free from VAT. These include agricultural products, medical treatments, and cultural activities.
However, birth-control items like condoms are no longer part of that list. This marks a clear policy shift after many years of trying to limit population growth in the past.
13% VAT Coming into Effect
Under the new rule, condoms will now face a 13% tax. For many people, this move feels surprising because China spent decades encouraging smaller families. But today, the situation is different. The number of newborns has dropped for many years, and officials believe that encouraging families to have more children is important.
The new VAT law will start on 1, January 2026 , giving businesses a full year to update their systems and prepare for the change.
China’s Birth Rate Keeps Falling
China’s birth rate has fallen for decades, and 2024 recorded only 6.77 births per 1,000 people. Many experts say the long-term impact of the one-child policy, which lasted from 1979 to 2015, is still shaping the country today.
During those years, most families were only allowed to have one child.
The government used fines, registration limits, and workplace rules to enforce the policy.
More Support for Families
While condoms will now be taxed, several family-related services will become cheaper. VAT will be removed on childcare providers, elder-care centres, and marriage-related services. The government hopes these changes will help people feel more comfortable about starting families.
Many young couples in China say the high cost of raising a child is one of their biggest worries, so lowering service prices may bring some relief.
Watch the video here:
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