Why is China imposing a VAT on condoms?

China is imposing a VAT on condoms as part of a strategy to encourage childbirth amid declining birth rates and an aging population.

How does China's new tax policy affect HIV rates?

The tax may increase condom prices, potentially leading to reduced usage and a greater risk of HIV transmission, especially as HIV rates are rising in China.

Home / Health / China Taxes Condoms: Birth Rate Reversal Strategy?

China Taxes Condoms: Birth Rate Reversal Strategy?

Q: What other services are tax-exempt in China now?

Child-care services, elder-care institutions, and marriage-related services are now exempt from VAT in China.

2 Dec

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Summary

China imposes VAT on contraceptives, including condoms, for first time in 30 years.
New tax aims to encourage childbirth amid declining birth rates.
VAT exemption removed from contraceptives, while childcare services are exempted.

China Taxes Condoms: Birth Rate Reversal Strategy?

China is implementing a new value-added tax on contraceptive drugs and devices, including condoms, for the first time since 1993. This policy change comes as the nation grapples with a declining birth rate, which has seen the population shrink for three consecutive years. The added tax on contraceptives aims to subtly encourage childbirth.

In contrast, child-care services, elder-care institutions, and marriage-related services are now exempt from VAT. This reflects a significant policy reversal, moving from limiting births to actively promoting them. Beijing has introduced various pro-natalist measures, including financial incentives and improved childcare support, to address the demographic challenge.

Experts suggest the VAT on contraceptives is largely symbolic, intended to shape social attitudes towards childbirth and reduce abortions. The move also coincides with a rise in HIV cases in China, primarily linked to unprotected sex, raising concerns among the public about potential increases in STDs due to reduced condom use.