China Tax on Condoms: A Counterproductive Attempt to Boost Birth Rate
China is implementing a 13% value-added tax (VAT) on condoms and contraceptives starting January 1st, reversing a three-decade exemption, as part of its efforts to boost the birthrate and modernize its tax laws. This move, included in a 2024 VAT law, follows the relaxation of the one-child policy and the introduction of various incentives like childcare subsidies, despite having a marginal impact on the country’s birth rate. While some experts believe this tax will have a negligible effect on fertility, others express concern about the message it sends, particularly for women, and highlight that the revenue generation is not the primary motivation. The tax change may be a shift towards less direct encouragement and an attempt to codify the tax system further.
John Q. Hosedrinker